David Zaslav takes on Netflix in his first earnings call for Warner Bros. Discovery

By Brian Stelter, CNN Business

As Netflix licks its wounds and investors worry about big streaming bets, David Zaslav is positioning Warner Bros. Discovery as a “far more balanced” company.

“We have the ability to ring any number of cash registers,” Zaslav, the longtime Discovery CEO who took control of WarnerMedia earlier this month, told Wall Street analysts on Tuesday during the new company’s first earnings call.

Those include streaming; cable and satellite channels around the world; theatrical movie releases; and gaming.

“I think it’s a big benefit that we’re a fully diversified company,” Zaslav said, acknowledging a “moment of uncertainty” about Netflix and the wider streaming wars after Netflix reported its first subscriber loss in nearly a decade last week, leading to a morning in which its stock dropped 35%.

Warner Bros. Discovery officially launched on April 11, nearly a year after AT&T struck a deal to spin off WarnerMedia and merge it with Discovery. The new company incorporates CNN, HBO, the Warner Bros. studio, Discovery’s channels, and many other assets.

“Our mission is simple: to be the world’s best storytellers, with world-class products for consumers,” Zaslav said.

He said Warner Bros. Discovery’s “balanced monetization model” gives the company a “unique hand” — a not-so-subtle contrast to Netflix, which has historically been judged almost solely on subscriber totals.

“Zaslav comes out swinging at Netflix,” Lightshed Partners analyst Rich Greenfield tweeted during the conference call.

Zaslav assured investors that “we have no religion about any one platform or window versus another,” but instead would do what’s best in each individual content circumstance.

Zaslav was also blunt that “we will not overspend to drive subscriber growth” and “we are not trying to win the direct to consumer spending war.”

Warner Bros. Discovery chief financial officer Gunnar Wiedenfels reiterated the combined company’s intent to find $3 billion in cost savings.

“That target will ultimately be conservative,” Wiedenfels told investors on Tuesday’s earnings call.

Wiedenfels said his team is working to “analyze the ROI (return on investment) of each dollar spent” across the company and hinted that he already sees inefficiencies at the former WarnerMedia.

The executives cautioned that the integration of the new company will take time, and they said they would share a detailed financial outlook in the coming months.

But Zaslav also said the new management team will take “swift and decisive action” in some cases, citing last week’s sudden closure of CNN+, the news streaming service that launched last month in a bid to attract subscribers in an era of cord-cutting.

Hundreds of CNN+ staffers received layoff notices in what was perceived to be a prelude to further cutbacks. (Some of the staffers will be shifted to other roles at the company.)

Zaslav praised CNN at length on Tuesday’s call, calling it “the best journalistic organization in the world” and saying “we’re fully committed to it.”

He didn’t elaborate on the CNN+ decision, but Warner Bros. Discovery executives said last week that they determined that the previous management team’s plan for CNN+ did not fit in the new company, which intends to roll out a single super-sized streaming service.

Zaslav and Wiedenfels said Tuesday that the rollout — combining HBO Max and discovery+ — will take some time, and didn’t commit to a specific launch date.

Zaslav said the streaming service will have “a range of tiers,” including advertising-free and “ad light.”

Media companies are increasingly turning to ad-supported streaming offerings, priced at a lower monthly rate than ad-free, to entice subscribers.

The new management team’s comments came on the morning of Warner Bros. Discovery’s first quarterly earnings release. The earnings report only included Discovery’s businesses, however, since the merger did not take effect until April.

Discovery posted strong profits for its cable channels and a 13% uptick in overall revenues.

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