Nobody can accuse David Zaslav, the incoming CEO of the newly-minted Warner Bros. Discovery, of not speaking his mind, as he freely took shots at competitors and WarnerMedia’s outgoing leadership in a first quarter call with investors today. During the questions and answers portion of the call, Zaslav made a comment that has been interpreted by some as a swipe at Netflix.
“We will not overspend to drive subscriber growth,” said Zaslav to his investor group, as reported by IndieWire. According to a 2020 report, Netflix was then spending $6 billion on licensing original content to build a library twice as big as Amazon Prime’s. This month, those seeds bore bitter fruit as the streamer reported a loss of 200,000 paying customers, a trend that has the service implementing panic moves including considering hosting ads on their platform and imposing a fee for customers who share their passwords. All of this on the heels of an unpopular hike in the service’s price.
David Zaslav’s comments about former Warner Bros. CEO Jason Kilar’s spending was not as veiled, saying, “At Discovery we had almost always $3 million in free-cash flow. Now at WarnerMedia, they had $40 billion in content spend and almost no free-cash flow.” This follows Zaslav’s axing of Kilar’s final project, CNN Plus, a month after launch.
In the call, he also took a broadside against the Kilar era’s streaming-first approach to film distribution, using the box office success of The Batman as an example of movie theater showings being instrumental to promoting a film’s presence on the HBOMax service. “Should we collapse the entire motion picture business on streaming? I said, ‘No.’ But now the data is showing ‘No Way.’”