THB #202: The Sky Must Always Be Falling

Nervous Times at The Grill

Q: How much have things at Warner Bros Discovery changed in the last week… in the last month… in the last three months?

A: Not that much.

But it’s August. All that is really left on the news calendar is the Disney quarterly on Wednesday. So media seems inspired to dine out on a WBD quarterly whose horror show pretty much comes down to a reduction in 2023’s projected EBITDA from $14 billion to $12 billion.

Is this good? No.

Is this a sign that the company is going under and needs to be sold immediately? No.

I am perfectly fine with writers arguing why WBD, as was pretty much the case since the takeover happened, is a mess. I don’t completely agree, but you can argue it without being a twit.

What you really can’t argue is that the sky fell on WBD yesterday.

But Puck has gone all-Zaslav in the last 36 hours, hysterically arguing every side of the issue with country club confidence. And Deadline decided to write a 3-person-bylined op-ed that came down to these 3 ingenious insights…

#1: Rev Up J.J. Abrams & His Bad Robot Slate
#2: Leave Walter Hamada Alone
#3: Give Mike & Pam The Runway They’ll Need To Make Warner Bros Successful

Bad news. The JJ Abrams deal is a pre-Netflix-stock-flop deal. The choice to pass on a $20m per episode series is a sign of sanity, not disregard for talent. Walter Hamada is a lightening rod. Abdy & DeLuca might want him to stick around (if he leaves now, they are somewhat blind), but he does not have the strong support of the genre community.

Those first two suggestions could easily have been written up by personal publicists. The third, let DeLuca and Abdy do what you hired them for… duh!!! That, followed by something written by their personal publicist.

WTF?

At least The Ankler had the chops to move onto the Cindy Holland rumors instead of just lingering on the non-surprise “surprise” on Thursday. (Okay… the details might have surprised… but not on the level of the response.)

But many of us who cover this space are acting like a robot from a 1970s comedy where there is too much input, sending the robot into a manic tizzy, finally having its circuits zap out with a little smoke.

Every one of the major streamers is very, very different. But a few of the dilemmas of the moment are shared. There is a natural cap on domestic subs. Netflix has hit it. Disney is close. And everyone else is conscious that it is coming up, most likely this year.

After that, it’s colonizing the world. Netflix is way out ahead. But they are a bit constipated at 150m international subs. Everyone else is chasing, so more aggressively at this point than others. In order for the economics of streaming, all of these players need to have a solid domestic business, but also, an aggressive and growing international business.

Also, they have all come to accept, in a flash, that throwing endless amounts of cash for new content for which streaming platform support is the only financial return. Universal and on-Zaslav’s-word Warners are committed to multiple windows. Paramount and Sony are floating somewhere in the middle. Disney seems to be anti-theatrical except for pre-chewed IP.

You can have the argument in any direction… but you can’t argue both ways and be seen as intellectually honest.

Today on Wall St, Comcast Disney, Netflix, and Paramount were all up. Only WBD was down. Why?