Warner Bros. Discovery CEO Says Direct-To-Streaming Movies Provide "No Value" To HBO Max

Warner Bros. Discovery CEO David Zaslav has signaled a strategic shift away from direct-to-streaming releases, and back toward movie theaters. In an earnings call reported on by The Wrap, Zaslav cited an analysis of HBO Max streaming metrics that demonstrated exclusive releases on the platform did not provide any return on investment.

"We were able to see which content people are spending time watching, what content is really powerful to us in terms of reducing churn, and then there was a lot of content that just wasn't being viewed," Zaslav said. "And so we were able in many ways to Monday morning quarterback, and that's what led us to the conclusion that direct-to-streaming movies were providing really no value to us."

For example, Magic Mike's Last Dance--which was produced by Steven Soderbergh as an HBO Max-exclusive film--was released in approximately 1,500 theaters two weeks ago, with an expansion to just over 3,000 theaters this past weekend. While it has grossed less than past Magic Mike films with $19.4 million so far, unnamed inside sources told The Wrap that WBD has been pleased with the film's performance--and believe as a result it will have a higher profile on HBO Max than it would have as a streaming-exclusive debut.

"The actual perceived value of content increases when there's a great expectancy and excitement and want to be part of something… and they get to experience it with others, either in a packed theater or on a Sunday night," Zaslav said.