Corporate earnings calls are not typically sites of high drama. Last week, however, a routine update for the shareholders of Warner Bros. Discovery resonated far beyond its intended audience. Not only were non-investors deeply invested in a wonky presentation by a business executive; observers anticipated said presentation with a breathless, conspiratorial fervor typically reserved for a pop star’s surprise album drop. Stranger still, this was the second such event in less than three weeks.
First, Netflix followed up its panic-inducing first quarter with a loss of nearly a million subscribers worldwide—about four times the figure that began its downward spiral, but half the decline previously projected—an outcome CEO Reed Hastings successfully spun as “less bad.” Attention then turned to Warner Bros. Discovery, which was set to report on its first full quarter as a merged entity. CEO David Zaslav was under pressure to set forth a sustainable vision for his new domain, which encompasses a film studio, several TV networks, two streaming services, and a treasure trove of lucrative IP. Tensions were especially high following news earlier in the week that Warner Bros. Discovery had pulled the plug on Batgirl, a near-complete $90 million movie that, alongside Leslie Grace in the title role, featured the return of Michael Keaton as the Caped Crusader—the biggest character in the company’s biggest franchise.
In light of what happened on Thursday, though, some of the rumors that flew ahead of the event look borderline histrionic: that HBO Max would be folded into Discovery+, reduced to a subsection within a much less popular app; that HBO Max would shed up to 70 percent of its development staff; that HBO Max might jettison its scripted originals altogether, putting even beloved, Emmy-winning shows like Hacks at risk. Instead, Zaslav and his lieutenants largely confirmed what we already knew—HBO Max and Discovery+ will combine into a single platform. A projected launch date, around summer 2023, was new information, but the blended service’s price point and even name have yet to be announced. The same goes for company leadership’s precise plan for achieving a targeted $3 billion in cost savings, which is likely to include significant layoffs.
Still, those rumors didn’t quite come from nowhere. On top of the typical stress that accompanies a big merger, in which executive turnover leads even longtime employees to fear for their jobs, Warner Bros. Discovery began abruptly, and without warning, removing titles from HBO Max. Gone are recent films like Seth Rogen’s An American Pickle and TV series like Vinyl, the period drama with a pilot directed by Martin Scorsese that was canceled after a single season in 2016. The ensuing amateur detective work quickly spawned a Twitter account. (Sample tweet: “after saving it from TruTV purgatory, At Home With Amy Sedaris is no longer on HBO Max, RIP.”) IndieWire reported that some of the removed titles may be the basis for a tax write-off, but without any official comment from Warner Bros. Discovery, the vanished projects only fueled speculation that anything was fair game.
These moves unfolded alongside some more open, if equally brutal, maneuvers. In leaning away from linear TV, Zaslav ended scripted development at networks TBS and TNT, then axed existing programs like Full Frontal With Samantha Bee. (One comedy, Nasim Pedrad’s Chad, was even canceled the day of its season premiere.) Meanwhile, HBO Max shows like Little Ellen and Gordita Chronicles were scrapped, part of a larger drift away from animated and family-friendly series.
Then, of course, there was Batgirl. The film was initially green-lit by former WarnerMedia head Jason Kilar as a straight-to-Max project, but that distribution strategy doesn’t fit with Zaslav’s polar-opposite philosophy of embracing theatrical releases to maximize profit. (Scoob!: Holiday Haunt, the animated sequel to 2020’s Scoob!, was also scrapped—no pun intended—in lieu of a streaming-only release.) Batgirl was too expensive for a film that wouldn’t bring in any box office revenue, but reportedly wasn’t compelling enough to support a wide release. Still, it seemed exactly like the kind of event release a parent company would theoretically value over yet another tax write-off, which is what Warner Bros. Discovery will take in Batgirl’s place. Instead, the film fell victim to a corporate pivot its creators and cast had no say in, becoming a very expensive signal that the new regime isn’t messing around.
How we got here says as much about the state of the Streaming Wars and consumer anxiety writ large as the conflict within the companies themselves. Ever since Netflix reported its first subscriber loss in over a decade this spring, stock prices across the streaming and entertainment industry are down, reflecting an increasing disillusionment with the growth-over-everything philosophy that drove valuations up over the past decade. This reversal caught some legacy companies that went all in on streaming flat-footed, like WarnerMedia. Kilar may have alienated talent by throwing Warner Bros.’ entire 2021 slate onto HBO Max, but he successfully propelled the streaming service into an industry leader, as Wall Street wanted him to. Based on the market’s latest 180, Zaslav knows he won’t be rewarded for a similar strategy.
Headed into the earnings report, then, tensions were understandably high, both within Warner Bros. Discovery—hence the pot-stirring leaks to the press—and between the company and its customers. (I realized just how far the sentiment had spread when I opened TikTok and saw a Succession fan account post a premature obituary for HBO Max.) Though the actual presentation didn’t contain anything more malicious than a cringeworthy, 30 Rock-ian slideshow, consumers were primed to prepare for the worst. So too were investors after a loss of 300,000 domestic subscribers, announced alongside only a modest increase to a total of 92.1 million global subscribers across its streaming services.
While the future of Warner Bros. Discovery, let alone the streaming revolution as a whole, remains unknown, there are still some key takeaways. One is that giant conglomerates can no longer be relied on to support even their highest-profile releases, let alone bits of archival ephemera like the supernatural family drama Here and Now; the very platforms encouraging us to abandon physical media are now proving its necessity as a hedge against corporate whims. Another is that the days of unchecked spending in pursuit of subscriber growth are over. They have been for a while, of course, but some reminders are more dramatic than others. HBO Max isn’t going anywhere. You still can’t blame interested parties—fans who may not care about financial trends, but certainly care about the art those trends affect—for picking up on the ambient uncertainty.