MOVIE NEWS – Warner Bros. CEO David Zaslav has admitted that the current streaming era is “unsustainable” and that Joker 2 was “disappointing.”
Warner Bros. Discovery CEO David Zaslav says the current streaming and entertainment ecosystem is “unsustainable.” During a Thursday phone call with investors and executives, Zaslav expressed serious doubts about the company’s current viability and future. All of this is in line with what many people in Hollywood have been feeling for years.
According to a new report from Variety, the CEO and other executives have come under intense pressure and scrutiny over a range of issues related to business practices in an increasingly volatile media industry. The changes appear to have led to less-than-expected revenue for shareholders and others with a financial interest in the business’s success.
Warner Bros. Discovery may have to sell its companies
According to Zaslav, the entire media industry is expecting a “generational disruption”. In essence, it points to the changing consumption methods and models of young people as the biggest problem facing companies. He noted that consumers are being inundated with subscription services and apps (which are increasingly difficult to unsubscribe from, which is losing customer interest – not to mention that the average person is increasingly financially burdened by rising inflation without wages keeping pace), creating a dynamic that which is “unsustainable”.
He then added that “this is an industry that really needs to meaningfully consolidate.”
However, investors were unimpressed by Zaslav and his executives’ answers as they continued to ask for more specifics on how the company plans to change with the times. “Your company is trading like a company that’s declining in earnings,” said Ben Swinburne, media industry analyst at Morgan Stanley. “What are the benefits of owning all of these companies?”
“We see the benefits of running this company on an integrated basis every single day,” said Warner Bros. Discovery CFO Gunnar Wiedenfels. At the same time, Zaslav argued, further consolidation may be necessary to keep the company viable.
Warner Bros. Discovery struggled with debt and production problems throughout Zaslav’s tenure. Especially for more traditional products – namely movie studios and television networks. Zaslav claimed that the company is trying to solve these operational problems (as evidenced by several rounds of layoffs at the company in recent years) while, as reported by Variety, “capture consumers who are increasingly migrating to viewing their content favorites on demand via broadband.”
Competition and increased options tend to benefit consumers, not these big corporations who have to increase profits year after year (which is an unsustainable model in itself, but who will tell capitalism and investors that?) as production costs rise. According to Zaslav, this is precisely why “this is an industry that really needs to meaningfully consolidate.”
David Zaslav says Joker 2 is ‘disappointing’
According to Variety, the failure of Joker: Folie à Deux was also discussed in the results report. Acknowledging that the sequel’s performance was “disappointing” and that it will likely play a role in the studio’s next quarter’s performance, CEO David Zaslav said in a phone call: “Inconsistency also remains an issue at our motion picture studio, as reinforced recently by the disappointing results of Joker 2.”
For motion picture group heads Michael De Luca and Pamela Abdy, Joker: Folie à Deux was the first project greenlit under their tenure. At the time, this seemed like a sure bet, given that 2019’s Joker grossed billions worldwide and was one of the stars of the awards season, and even snagged a Best Picture Oscar nomination and Joaquin Phoenix a Best Actor win.
Zaslav met with director Todd Phillips shortly after WarnerMedia and Discovery merged in April 2022. Filming locations were reportedly negotiated to reduce the cost of the film, which had ballooned to $200 million. Warner Bros. wanted to film in London, which would have cut costs by 20%. However, Phillips wanted to film in Los Angeles. Other problems between the studio and Phillips reportedly continued throughout the film’s production, from the film’s debut at the Venice Film Festival (Warner Bros. was not on board) to Phillips’ refusal to screen the Joker sequel before its release.
Source: Variety
