David Zaslav, CEO and president of the newly-merged Warner Bros. Discovery has said that HBO lost $3 billion last year, failing to earn back a huge amount of money spent on content, Deadline reports. The comment comes after cost-cutting measures saw a huge amount of original content pulled from HBO Max, with the biggest losses coming from the animation department.
In a keynote presentation at the RBC Media conference, Zaslav touched on a number of the difficulties that have come with the Warner Bros. Discovery merger, including a need to rethink streaming models. “Right now, we can get 30 million people with Euphoria, but they can come on for two months, watch Euphoria and then leave,” Zaslav explained. “Do we want to create incentives for people to be there? There are a lot of companies that have a business where the majority of people are there for the year.”
Concerning HBO’s finances, he said “I don’t know if I’ve ever seen anything like that,” explaining that HBO spent $2.5 billion in 2019 for a profit of $2.5 billion, while in 2021 it spent a whopping $7 billion, which then saw a $3 billion loss. While discussing the loss, Zaslav pointed out “all those direct to streaming movies just thrown right on top” of HBO Max.
The company has already started cost-cutting measures, which have included huge amounts of content being removed from HBO Max. Leadership has floated the possibility of selling some of this content to other streaming services, as well as selling non-exclusive rights to original content that Zaslav says “is not being watched, or we don’t think anyone is subscribing because of this.”
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