David Zaslav Declares War Against Churn and ‘Big Bleeder’ Streamers: ‘This Is a Business of Artillery’

variety.com:

Cynthia Littleton Business Editor David Zaslav and his team could be forgiven for sounding a little stressed on Warner Bros.

Discovery’s Q1 earnings call. The company’s numbers were pretty grim for a CEO who prizes his free cash flow. The Warner Bros.

Discovery chief was fired up about a number of issues affecting the studio behind the shield, and he fired off verbal volleys, pop culture quotes and metaphors, invoking everything from military terminology to Formula 1 racing to “The Blues Brothers.” But the liveliest moment of the hourlong conference call with Wall Street analysts was Zaslav’s discussion of subscriber churn rates and how they differ between HBO Max and Discovery+, the two streamers that are set to be married and relaunch as a joint product dubbed Max on May 23. “The real challenge is the churn,” Zaslav said as he and WDB chief financial officer Gunnar Wiedenfels outlined plans to take Max to the promised land of profitability by next year. “With churn it’s very difficult to to build a strong business.” Discovery+, which launched in January 2021, has been blessed with a low churn rate.

HBO Max, which bowed in May 2020, not so much. “Driving (down) that churn may be more important than driving the growth. If we can drive down the churn, the growth will be very substantial,” Zaslav said. “And so we have a series of attacks.” (The phrase “command and control” was used six times by executives during the call.) The basic battle plan is to give Max a broad menu of content with wide appeal to families. “The more people that use it in the family, the more the more engaged people are, the broader the offering, the lower the churn,” Zaslav said, pointing to Discovery’s experience with streaming platforms in