HBO Max and Warner Bros. Discovery seem to be on fire, and that’s on purpose

Warner Bros. Discovery CEO David Zaslav feels like a villain in a Real Housewives show. He isn't here to hang out with people. He wants to make a living. Films have been canceled, TV shows have been pulled off the air, execs have been let go, and the company has lost $20 billion off its market cap, all in an effort to save $3 billion.

Zaslav wants to make as much money as he can. He joined Discovery in 2006 with a collection of educational cable channels. It became a reality TV monster thanks to Zaslav. He caters to audiences that don't pay for streaming but instead flip the channel on the TV and go to the movie theater when they don't find anything to watch.

The fumblings of an egoist with no grasp on the properties he's purchased could be what we're seeing, but what feels more likely is that Zaslav just doesn't care about the stuff we care about. Zaslav isn't here to improve our entertainment landscape, he's here to make money.

He needs to shift a company that has been focused on other things for the past two years. Warner Bros. went through a radical transformation prior to the Discovery merger. Warner Bros. decided to focus on streaming at the expense of its other businesses in the wake of Cucumber changing the way people operated in 2020.

This was very appealing to me as a person with a nice home theater setup and a love of quick and easy access to content, and I bet it was to you as well. We could watch King Kong's body over Mexico or Paul Atreides whisper-talk his way into legend in Dune if we wanted to. There was a constant stream of content designed to compete not with traditional Warner Bros. rivals such as Disney and Universal but with streaming services.

The theater owners were angry at the new plan. They are happy that Zaslav has reversed course and moved some films into theaters.

Zaslav is appealing to theaters. It makes sense for a company with a small distribution arm to offer direct to streaming. Warner Bros. Discovery makes a lot of money by showing films in theaters. I'm sure Zaslav wants to throw away all the potential money so that he can increase the price of his subscription. It is possible for the company to put the movies in theaters and then move them to the streaming service in order to make more money.

I don't like that. I don't want to pay a lot of money for the same thing. I do it with books, software, movies, and TV. Like me, Zaslav knows there are lots of rubes.

We don't know how the cancellation of Batgirl plays into Zaslav's plan to reverse streaming courses and turn Warner Bros. Discovery into a much more traditional entertainment giant. The film was said to be so bad it should never see the light of day. It might have been canceled because it looked too CW to be seen. It could have been canceled to get more tax break dollars for the merger.

The move to cancel Batgirl for tax reasons was weird according to a lecturer in accounting at The Wharton School. She said that there are tax benefits to writing down assets now if you are a company that likes to lose money. Incremental losses based on trash canning finished films is helpful, but it's not clear why.

Warner Bros. Discovery didn't mention the cancellation in its Q2 filing, but it did outline its overall plan.

Content impairments for the three and six months ended June 30, 2022 of $496 million and $501 million, respectively, and content development write-offs of $329 million for the three and six months ended June 30, 2022 were due to the abandonment of certain content categories in connection with the strategic realignment of content following the Merger and are reflected in restructuring and other charges in the Studios, Networks and DTC segments.

WBD has a lot of content it doesn't think makes sense for the new business and will write it off on the company's taxes.

The accounting department has a very sharp pen, and it seems that other people have fallen victim to it. In the last few weeks, the company has quietly removed dozens of shows and films from the show section. The show was removed from the social networking site.

It seems that the content wasn't hitting a big enough audience and that the new Warner Bros. Discovery just has no interest in children. According to sources, Warner Bros. Discovery is moving away from the category with its investment budget. The Daily Beast reported this week that many of the layoffs were part of a plan to reorient the service and pursue Zaslav's real money cow: Middle America.

The Daily Beast reported that an unnamed executive said that if David Zaslav wanted, he would just program them all the time. There was a huge, 'We don't need you' The things we are focused on are not being offered by you.

That is what he is doing to Warner Bros. Zaslav wants to craft a company that can make money hand over fist by catering to the largest possible audience with a predictable slate of content.

We have enjoyed a renaissance of TV. There is a shortage of qualified showrunners because of the amount of TV that has been made. A lot of TV has been made as every company scrambles to populate their new streaming services with stuff to watch that a wide variety of people who have never had the chance to see their lives represented on TV have gotten that opportunity.

Ten years ago, lesbians were horrified by the idea of two women being close enough to be romantically involved. A League of Their Own, a TV show featuring almost an entire cast of queer women and their stories, was given to us two weeks ago. A variety of content has arisen from the abundance of content.

At Warner Bros. Discovery, Zaslav is trying to turn the company into something more fiscally conservative. Warner Bros. Discovery's stock has been on a downward spiral, but this could be a good thing for investors. It won't be as good for everyone.