After "Batgirl": Warner/Discovery outlines strategy shift

Great movies belong in theaters first, was Warner Bros. Discovery CEO David Zaslav’s main message to investors yesterday.

Why it matters: On a call for its first quarterly earnings as a combined company, executives from the media conglomerate had to explain their bombshell decision to pull “Batgirl” before release.

Catch up quick: Warner Bros. Discovery posted a $3.4 billion loss that included merger related write downs.

• The company also for the first time laid out its larger content strategy — which involves launching two different streaming services. 
• Earlier this week, it shelved direct-to-streaming projects like “Batgirl” and “Scoob!: Holiday Haunt,” both of which were near-ready for release.

The big picture: Warner Bros. Discovery is trying to shape its identity amid heavy competition, and global economic worries.

• One of its main priorities has also been to find $3 billion in cost savings. CFO Gunnar Wiedenfels said that the company has $1 billion worth of cost savings already implemented. 

Between the lines: Despite fan outrage, a $90 million production for “Batgirl” to launch and live only on streaming doesn’t make business sense.

• Burying the movie also saves the company marketing costs and back-end payouts in contracts that pre-date the merger, CNBC notes.

What they’re saying: “When we bring theatrical films to HBO Max, we find they have substantially more value,”Zaslav said. 

• “The other thing is that we're going to focus very hard on quality …we're not going to put a movie out unless we believe in it.”

What to watch: Next year, HBO Max and Discovery+ will be combined into a single paid streaming subscription service.

• The new platform will start to roll out in 2023 in the U.S., with global expansion plans to follow. 
• In addition, the company also plans to launch a free, ad-supported streaming service.

Our thought bubble, via Axios' Javier E. David: The "Batgirl" debacle may be good for the bottom line, but it highlights how Warner has squandered a lot of good will with DC fan faithful — the same people they'll need to fill seats when a grandiose 10-year vision for DC movies ultimately materializes.

• The suits in Warner's executive suite mostly failed to build on early momentum from highly successful tentpoles like “Aquaman,” the first “Wonder Woman,” and more recently “Joker” and “The Batman” ("Aquaman" and "Joker" earned over $1 billion each during their cinematic runs).