In Streaming, David Zaslav: Warner Bros. Discovery Will Not Attempt to 'Win the Spending War'

In Streaming, David Zaslav: Warner Bros. Discovery Will Not Attempt to 'Win the Spending War' ...

The company that will be formed by the merger of Discovery and AT&T's will focus on profitable growth in streaming, according to Discovery CEO David Zaslav, with his CEO Gunnar Wiedenfels promising a "conservative approach" to content spending.

Zaslav admitted to analysts on the company's fourth-quarter conference call that "we intend on being careful and judicious," while also stating that the call it may be the last before the deal closes. "Our goal is to compete with the leading streaming services, not to win the spending war."

Zaslav stressed that the company's combined content expenditure would not be required to increase "significantly" after the agreement close, indicating that it will be focused on being "measured" and "smart" in spending when and where it makes sense to improve user satisfaction, rather than spending for the sake of sustainable growth. That also sparked an outburst that the Hollywood giants' streaming bets would turn profitable.

"We want to compete against Disney and Netflix, but we're a very different organization," Zaslav said at the conclusion of the call. "We are two fantastic companies. Disney has a group of people around the world who absolutely loves their product," he said, adding that it is doing "a great job building out that brand." Although Warner Bros. Discovery will be doing "very broad-appeal [right now], [it] has The Gilded Age going right now," Zaslav said. Would HBO be doing

Zaslav gave another example, indicating that one produces 600 hours of content for Food Network and attracts a strong audience, while earning $400 million. "It's possible that every individual would be treated respectfully, but now we get no money." The "shock and awe" offerings in the Warner library, "together with the nourishment and the great personalities," "is a really compelling menu and a great recipe we can lean into."

According to Wiedenfels, the firm will spend more than $4 billion on content in 2021. So, we are definitely spending enough from my perspective, and money does not score goals, but there is going to be how much will be enough going forward, he added. Instead of spending for the sake of the corporation, the merged business will focus on increasing the value.

The goal is to "spend enough" to enable an audience that they want to spend time with you and that they believe you are the location they want to be, and that you are important." Zaslav says

Zaslav said that the merged company would have "the most outstanding content in the industry," including DC Comics, Looney Tunes, HBO, Oprah Winfrey, the Gaineses, Discovery, and sports at Eurosport. He also said that the merged companies will benefit from its "most robust and complete" content offerings, thus Warner Bros. Discovery will benefit from its "broad spectrum to super-serve every demo and every family member."

The combined firm will have an "incredibly solid partnership, creatively and financially," Zaslav said after the closing of the transaction, noting a "balanced" business portfolio and "cost-synergy tailwinds."

Zaslav stated on Thursday that the merged business will not "solely depend on one business model," and that Warner Bros. Television was "one of the leading content arms dealers in the industry," adding that "there are not a lot of content makers out there, certainly not of the scope and quality" of Warners. He concluded that we can monetize across a wide range of cash registers."

Addressing the date of the merger close, he said, "hopefully" that this might happen before the advertising upfront season, so the merged company may form a combined upfront strategy.

Discovery's manager emphasized on the earnings call that free cash flow, which allows a company to fund growth without the need for external financing, had exceeded expectations in 2021, boosting financial momentum going into the merger.

Discovery and AT&T unveiled the megamerger in mid-May to form Warner Bros. Discovery, with Zaslav set to lead the combined company as CEO. The enlarged company is expected to generate $52 billion in revenues in 2023 and become one of the world's largest streaming companies. The merger will be approved by March.

He'll work with Warner Bros. Discovery in Los Angeles for the new content giant. "I'm going to be very hands-on," he said. "The better our content is, the better chances we have of being the world's leading media company."

Zaslav on Thursday said, "We have spent a lifetime in working for Discovery," but added that "we have all of our most exciting days and greatest tests ahead of us." And he added that the "next chapter will be even more rewarding and rewarding."

Zaslav praised CNN's global network, comparing journalists on the ground in "bullet-proof jackets and helmets," to other institutions, where "people behind the scenes" shared their views. "This is where you see the difference between a news service that has real, meaningful resources globally, news-gathering resources, and the largest and largest group of international journalists of any media organization, with the exception of the BBC."

Zaslav was asked about CNN's future and how they fit into the new division, and said he expects a discussion on CNN's intentions in the near future.

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