Gunnar Wiedenfels said the worst of a challenging effort to combine AT&T’s WarnerMedia unit and Discovery is now behind the Hollywood studio eleven months after the merger.“It was a tough year last year. Happy with what we achieved, and much, much better to be sitting here this year with a little bit of tailwind from all the tough decisions that we made and the balance is really shifting towards the opportunity for growth and building,” the Warner Bros. Discovery CFO told the Morgan Stanley TMT Investors conference on Wednesday during a session that was webcast.But the Warner Bros. Discovery finance chief bristled at the suggestion that the combined media entity was spending less money on content compared to what was expected from the two companies pre-merger. “I want to clarify something: I view this as having shaved off that excess. We didn’t abandon anything that made sense strategically, or financially,” Wiedenfels said of the reduced content spend for his studio post-merger.“We got a lot of criticism, especially in the press at the time. At this point, I think a lot of our peers and others in the industry have kind of made similar decisions. So we haven’t abandoned anything that made sense, and we’re very committed to continuing to invest,” he added as rival studios and tech giants have followed suit on cost-cutting as they curtailed what he called the industry’s “streaming exuberance” over the last decade.In the process, the industry has got back to a more rational managing of old and new media in the pivot to the streaming era. “There’s a reason why for decades the entire industry looked at a number of exploitation windows, adequately prices to optimize the return on investment. And we’re returning to that,” Wiedenfels said.His comments also came ahead of the coming rollout of the new HBO Max/Discovery+ combo streaming service in spring 2023, with details on branding and pricing to emerge during an April 12 media day.“On the DTC (direct-to-consumer) side, obviously hundreds of people at Warner Bros. Discovery are heads down working on the launch of the combined product in the second half of the year. That’s on track and it’s a critical milestone, because for the first time we’re going to be able to come out with a combined product, with all of our great content in one place,” Wiedenfels said.Other tailwinds the Warner Bros. Discovery finance chief pointed to include a renewed interest by his studio and rivals in the theatrical release for movie tentpoles, even as the film product is eventually headed to emerging streaming platforms.“One of the positive things coming out of this conference for me was a positive notion around the theatrical windows, some of the openings that have worked very well. And we know the value of that and we’re seeing it in our numbers. We’re seeing the difference that it makes to open the film in theaters and then get the benefits on all the downstream windows,” Wiedenfels told the investors conference.And even though the traditional pay TV business is declining, the need to make streaming work as a business model alongside traditional linear TV assets was stressed by Wiedenfels as he saw no wholesale pivot to online platforms in play.“We know what the trends are in the industry, but we want to use all cash registers that are available to us to get the highest return on every dollar spent. And that’s what we’re focusing on. Streaming is incredibly important,” he insisted.
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