THB #113: Au Revoir, Mon Kilar
How does one say “goodbye” to Jason Kilar?
He may the most challenging media figure in this era, so bright and smart and committed, so good at making media come to heel, and yet ever unable to close the deal on his idea of how the world must work. Almost no one is as charismatic in leading, never flinching, in the wrong direction.
Actually… that is an unkind definition. His ideas are not all in the wrong direction. Not mostly in the wrong direction. But what he has shown us, without the cover of The Warring Overlords of Hulu keeping him (in the media perception) from reaching his potential, is that he is yet to be able to express the most important skill of top leaders… to change when it is time to change.
Ironic, given that his argument is often that he is misunderstood because others aren’t willing to change.
Even now, there is an escape route for people who want to believe that his vision is a victim of AT&T’s failures and a need to change overall financial strategies… that what he did was great, nearly flawless… it just got caught up in the whims of those wacky warring overlords.
And to a degree, it is true.
I don’t think it would be fair to claim that the deal with Discovery was driven by Kilar’s mistakes.
I do think that it is fair to claim that AT&T decided that making a big bet on Zaslav was a better choice for the future than making a continuing big bet on Kilar.
Both were big bets. Neither assures a great future.
But to listen to Kilar on his Victory in Defeat Tour this week, you would think you were hearing from Harold Hill, not Diller or Eisner in their studio days.
If you believe Project Popcorn was a great success, you aren’t doing the math and you aren’t engaging the failure, in the industry’s perception, of the day-n-date model, full stop.
But as always, it seems, with Kilar, there is a real window to see it from his “that was his best failure ever!” angle. Even the most hardcore exhibition people will tell you that the 20 movies from Warners in release in 2021 (including 2 holding over from 2021) creating over $600 million in domestic box office was really helpful to their survival.
However… if you look at the numbers, the story is more complicated. Warners was responsible for $429 million at the domestic box office in the first 8 months of the years and just $167 million in the last 4 months… which is where most of the box office recovery was... at all but one of the studio’s biggest originally-theatrical bets.
If you want to see that clearly displayed, the total domestic box office in the first 8 months of 2021 was about $2.1 billion and the last 4 months of the year grossed about $2.3 billion. You can blur the lines various ways, but which market would you choose, 2021 before or after September 1?
Another sad story… none of the Warners movies could crack the domestic top 10 for the year. Their top grosser was Godzilla vs. Kong, which arrived in May and grossed $99.6 million domestic. Dune was their #2, with $92.4m, starting in October.
In many ways', this defines Kilar’s Folly, aka Project Popcorn. The failure was not the idea of pushing some movies to day-n-date (though yes, a failed strategy), but insisting on pushing ALL 2021 movies to day-n-date.
When Free Guy and Shang-Chi did well - though both were clearly hamstrung by the newly-vaccinated COVID market - the signs were there than the fall and holiday season could offer a major comeback… probably not 100%, but at least 75%.
But Warners was already locked into a strategy that could not take full advantage of that opportunity. Kilar had been so bold in December 2020 that he was damaging his company.
How did Project Popcorn work as HBO Max bait? Well… AT&T offers only very sketchy numbers. Sifting through the many versions of the story they tell, it seems that reports of 5.3 million domestic added subs in the whole of 2021 and, maybe, another 7.8 million new subs internationally are realistic.
For reference, the much more mature (aka closer to running out of new subs to realistically capture) Netflix reported 8 million new subs worldwide in just Quarter 4 and its stock got crushed.
So did Project Popcorn work or not?
The obvious answer is, “no.” The more complex answer is that it was an interesting experiment… until it was not.
Kilar told one jolly inquisitor that the industry followed the lead of Project Popcorn. Of course, this is just silly, as even Warners isn’t following the Project Popcorn lead. Meanwhile, Kilar was out selling the gospel of his myopic vision, undercutting The Batman by touting that it would be on HBO Max on Day 46. Because, you know, nothing sells a theatrical window like touting the next window not being very far away.
(Two weekends to go before HBO Max for The Batman… this weekend, look for another $7 million, next weekend, $5 million… then a huge drop-off. Around $375m domestic. Did Kilar’s Max promo cost the movie 10% a weekend in drop-off over its last 5 theatrical weekends? Probably. But it’s only another $50 million or so in theatrical. Guess that doesn’t matter.)
Kilar also wants responsibility for the new recognition of AVOD as a key piece of the puzzle moving forward… Netflix to follow. But Hulu, but Pluto, but Paramount+ and Peacock… not your invention, old bean. I personally think Netflix will eventually add an ad-driven tier at some point, as entire countries reject the cost of SVOD because they are just too poor. But domestically, it would be madness at this point.
Jason Kilar is no Fredo (even if he killed Jeff Zucker in a fit of pique… Fredo never had the guts to kill). But he faces the very real challenge of the brothers who could have taken over the Corleone Family. Jason has been a lot of Sonny, brash and sexy and driven by his passions. But Sonny will forever be the one that was ambushed at the toll booth because he was too hot headed.
Kilar still has the opportunity to become Michael. You know he was happy to shoot Sollozzo and McCluskey, no matter how he insisted that it was strictly business. BUT… it was the right business move also, even though he still got to be the one to get revenge on those who would have killed his father.
I know the metaphor is a bit off the normal track, but work through it. It fits Kilar like a glove. He is still the bright boy (about to turn 51), made fabulously wealthy by AT&T, with the freedom - short of having someone else’s company to run - to do whatever the hell he wants. So he will still be pollen to the bees, honey to the bears, ancient unwell icons to Lady Gaga.
Michael Corleone was a bore. All brains, no balls. The anti-Hamlet. All he did was win. At any price. Because that is what he needed to be.
Very rare is the combo Sonny/Michael. Usually, either a Sonny grows up and becomes a Michael or a Michael gets rich and suddenly feels compelled to become a Sonny because he thinks he missed something along the way.
Kilar will either grow out of his Sonny phase (and what a charming, non-violent Sonny he has built as his image… and maybe his truth) or he will be the industry’s version of the next Johnny Carson, the best guest on any podcast, the guy whose advice everyone wants, but rarely will follow.
I have already suggested that Paramount is his natural landing spot because they are an unfocused, out-of-control mess. They have nothing to lose in having a Sonny on the lot, making headlines and charming the hell out of their media for a few years.
The best time at that company for The Redstones was when they had Sherry Lansing, who is one of those rare Sonny/Michael types. All the charm and no fear of using the knife.
As for Kilar’s legacy at Warners… like everything else Kilar, double edged. Would his plan have worked out in time, regardless of the damage it might cause along the way? Probably. I am one who believes that the asset base for Warners is strong enough to find its way, much as Comcast. Many missteps along the way. But nature abhors a vacuum and powerful companies don’t just give up and die.
My issue with Kilar at Warners is not that he was wrong about everything. He was just too damned stubborn to seriously reconsider when he was wrong. And he was. Not infrequently.
Doesn’t make him any less smart or charming or interesting. Just makes him the poster boy for the muddled thinking that has become this era of the industry, smart people uninterested in what they don’t already know is a strength going into these jobs.
I bet I would be good friends with Jason Kilar… if he was willing to have a friend who didn’t think he was right all the time. Seems like a great guy. I can just imagine that look in his eye when he gets caught bullshitting. I’m sure his wife has seen it a lot. And I bet it’s charming as hell too. Under all the bluster and spin, he must be that guy. Now he has some time to let that guy emerge.
It will be interesting.
And now, the song parody I wrote when I was trying to avoid writing the rambling analysis above…
THE PLANS OF ZASLAV
(with apologies to Simon & Garfunkel)
Hello Jason, my old friend
Another job is at an end
Because a vision boldly reeking
Not as fast as ATT’s seeking
And the vision that was really just too plain
Within the plans of Zaslav
In hype streams, you were alone
Cut other segments to the bone
'Neath a halo you were made a champ
You got the media to simp and vamp
When their eyes were stabbed by the flash of your neon smile
What a pile
But now the plans of Zaslav
And in the naked light, I saw
Two thousand people, maybe more
People fired without speaking
Their expertise out without listening
People doing things that you just don’t understand
That’s your brand
Leading to the plans of Zaslav
"Fools" said you, "You do not know
Non-streaming like a cancer grows"
Hear my words that I might teach you
Take my streams that I might reach you"
But your words, insisted less was more
And ushered in the plans of Zaslav
And media, it bowed and prayed
To the neon god they made
And the sign flashed out its warning
In the words that it was forming
Then the sign said, "His-tor-y of the industry’s been walking and chewing gum
Or you’re dumb"
And whispered in the plans of Zaslav