David Zaslav’s Streaming Solution Looks a Lot Like Cable

The current streaming environment makes little sense and is not sustainable, according to Warner Bros. Discovery CEO David Zaslav, who spoke at the SVB MoffettNathanson conference today (May 18). The executive thinks he has an answer.

“The difficulty for a consumer is aggregating the content they love,” he said. Viewers have to search online for where to find their favorite shows, move between apps and manage multiple accounts and payments. Some media experts have cited consolidation as a potential solution or even the natural outcome of an over-saturated market.

“Consolidation is one answer, but it’s unlikely to be the answer,” he said. Federal agencies can make consolidation difficult due to antitrust law, and combining companies takes time. The industry is moving quickly, and consolidation might take too long, he said. What is more likely to happen is that streaming leaders repackage and market their products together, he said.

Media conglomerates have already begun merging their own platforms. Paramount Global is selling a combined Paramount+ and Showtime service, and this month, Disney announced a unified Disney+ and Hulu option. Zaslav’s own company is preparing for the launch of Max, the streaming platform that will combine HBO Max content with Discovery+ titles and will be available to consumers May 23. But Zaslav is suggesting these companies take the next step to package and promote their own streaming products with those of their competitors.

“It would be great for consumers (and) probably reduce churn,” he said, citing churn as the biggest problem with all streaming services. There would be a bigger package of content—which can draw consumers in—and repackaged services could benefit from multiple conglomerates marketing it. The industry shift could also improve the consumer experience, he said, because there would be fewer apps to navigate between and accounts to manage. Zaslav’s suggestion sounds awfully close to the traditional television model, in which consumers pay one price for a cable package that provides content from various networks.

It could be Warner Bros. Discovery that pulls the trigger on this potential industry shift. “If we don’t do it ourselves, it’ll be done to us,” by Amazon, Apple and Roku, who have already started, Zaslav said.

Zaslav’s interview with MoffettNathanson came as his company is entering its growth era after a year of reconstruction. Warner Bros. Discovery’s streaming and motion picture businesses were bleeding money, he said. In addition to launching Max to fix this issue, Zaslav has also reemphasized the release of films in theaters rather than on streaming platforms, which reduced the quality of the movies and didn’t help with subscriber growth or churn reduction, he said.