Canceled movies, disappearing series: What the hell is going on at HBO Max?

90 million dollars had already been poured into the movie "Batgirl", most of the work had already been done on it, yet the CEO of Warner's streaming service decided to shelve it. This was the opening shot for a whirlwind of rumors, the removal of additional films and series and a collapse of the stock value. What is happening in HBO Max and what does it mean for us?

Ilan Kaprov

07/08/2022

Sunday, 07 August 2022, 00:00

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Turbulent days are passing for the streaming industry, where the main forces continue to suffer blow after blow.

In recent days, most of the attention has been directed towards Warner Bros. Discovery, the parent company of HBO.

The veteran network only recently returned to dominate the Emmy nominations, and industry executives have named its streaming service (HBO Max) the best today.

So what happened and how might all this affect the streaming map of all of us in the coming years?

Let's start with the summary of the events.

Last Tuesday, Warner Brothers Discovery announced the decision to shelve the film "Batgirl", which was intended to go directly to HBO Max without going through the theater first.

The announcement came as a big surprise after about $90 million was invested in the production, with names like Michael Keaton, JK Simmons and Brendan Fraser in the cast.

The film was in advanced stages of editing and its filming was finished.

The pair of directors, Adil Al Arabi and Bilal Falah (creators of "Miss Marvel", "Bad Boys Forever"), received the message as a complete surprise when they were in Morocco on the occasion of Al Arabi's wedding.

They managed to release a press release in which they expressed great shock and sadness at the decision.

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A post shared by Adil El Arbi (@adilelarbi)

However, at the same time as the announcement of the cancellation, vigilant subscribers and surfers began to notice titles disappearing from the HBO Max library, all films created for the service and not previously shown in the cinema: a romantic comedy called "Moonshot" starring Lana Condor ("To All the Boys I've Loved") and Zach Braff ("Scrubs" ");

the action comedy "Superintelligence" starring Melissa McCarthy, Bobby Knavely and James Corden;

the fantasy comedy "American Pickle" starring Seth Rogen and Sarah Snook ("Heirs"), the remake of "The Witches" directed by Robert Zemeckis ("Forrest Gump", "Back to the Future") and starring Anne Hathaway;

The crime thriller "Locked Down" and the drama "Charm City Kings" which won praise at the Sundance Film Festival.

Another comedy starring LeBron James that was slated for release on July 28 was pulled from the schedule and later learned to have been shelved as well.

The purification does not end in the field of cinema.

The series "Vinyl" produced by Martin Scorsese, "Mrs. Fletcher" starring Kathryn Hahn, "Camping" by Lena Dunham, "Divorce" starring Sarah Jessica Parker and "Escape" produced by Phoebe Waller-Bridge - are also no longer available for service subscribers.

The series "Sliver of Love", "Gordita Chronicles" and Ellen DeGeneres' animated series "Little Ellen" have been notified of their cancellation.

It is quite possible that this list will continue to grow in the near future.

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Removed from HBO Max.

"Vinyl" (Photo: HBO)

Savings in licensing fees.

"Escape" (Photo: HBO)

why is it happening?

All the cancellations and cuts come amid the completion of one of the largest media deals ever - the merger between Discovery and WarnerMedia which is estimated to be worth $43 billion.

The deal, which was finally approved last April, makes Warner Bros. Discovery the owner of brands such as the CNN network, DC Comics properties (Marvel's equivalent), Warner Studios, a vast gallery of films and series built from the archives of the two companies, the cable networks TNT and TBS - and the icing on the cake , the prestigious cable network HBO on its many properties.

As part of the new company's plans, it was agreed upon a required cut of three billion dollars that it must make in order to function with operational efficiency.

This amount will be achieved, among other things, through extensive layoffs.

About 70% of HBO Max employees are expected to lose their jobs, because the service itself will no longer lead dedicated source productions, but is intended to be a hostel for the content of the company's other properties.

Part of the cut is expressed in the cancellation of future projects in order to justify the tax associated with them.

Besides "Batgirl" there is also the sequel to "Scooby Doo!", which was canceled even though it was in the final stages of production.

This belt-tightening also affected series on the company-owned cable networks.

The second season of the comedy "Chad" was canceled a month ago on TBS on the very day it was supposed to air, when it was all set to air.

This is also the case with the new reality series "The Big D", also by TBS, which was filmed in its entirety, its promos have already aired, but it was finally canceled about three weeks before its scheduled premiere in July.

The fact that last Thursday Warner Brothers Discovery revealed to its investors its first quarterly report, led in the days before to a wave of rumors and reports of an intention to get rid of many more properties, get rid of the HBO name and create a completely new streaming service. All of this did not happen, but to understand well more the mindset at Warner-Media,

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Earned $246 million in 2021 (Photo: GettyImages, Kevin Dietsch/Getty Images)

This is not Netflix

Zaslav, a member of a Jewish family from Brooklyn, has served for the past 18 years as CEO of Discovery Corporation. In 2021, his position as CEO of Discovery brought in no less than 246 million dollars.

Three of them as an annual salary, another 26.5 million as a bonus and 203 million in the value of the shares he owns.

In his new role, Zaslav effectively steps into the shoes of Jason Killar, who served as WarnerMedia CEO for the past two years, and aside from saying it openly, Zaslav has done everything to express his dismay at his predecessor's management choices. Killar fully embraced Netflix's business model, with attractive content that is destined to reach the streaming service exclusively to increase the number of subscribers. The days were still the days of the pursuit of subscription numbers, and although Killar upset a lot of people in Hollywood with the decision to transfer all the films of Warner Studios directly to HBO Max during the Corona period, the number of subscribers indeed grew.

All of this was true until the great collapse of the stocks of the major technology companies, primarily Netflix.

After years when investors were willing to accept huge annual losses just for the potential promise of future profit - the celebration is over.

Netflix was hit hard by this disillusionment and is currently in the midst of rethinking its business model.

Zaslav understood that his investors would not agree to receive baseless promises about an increase in subscriptions again, but that the situation was even worse than that.

The report published by Warner Brothers Discovery pointed to lower profits than expected and a smaller than expected subscriber growth potential. As a result, the company's stock plunged by 15%.

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No mediocre content.

"Heirs", HBO's opposite example (Photo: HBO)

The strategy that Zaslav presented to investors effectively erases Kilar's legacy in its entirety.

Discovery-Warner will stop producing cinematic content intended for streaming only, in a move that explains the decision to shelve "Batgirl".

It is expected to return to the classic model of widespread cinematic distribution to generate cultural importance and talk around the films, before they arrive on the streaming service 45 days after the premiere on the big screen.

As a result, the projects will also be carefully selected, with works like "Batgirl" that are not big enough to be a blockbuster, but come with a cost that can support a quality series, simply are not economical for the company anymore.

And what about the content that was deleted from the service?

Since technically the streaming service purchases content from other entities under the "Warner Brothers Discovery" umbrella, such as HBO, if it is possible to get rid of some of the margins, that is what Zaslav prefers to do.

Part of this decision stems from the need to cut three billion dollars, but the titles that Warner Bros. Discovery chose to part with are not by chance works that were not successful, to say the least.

In other words: Zaslav wants to clean HBO of mediocre content as a kind of statement about the quality level of the service.

Here, too, you can see a complete denial of Netflix access.

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Where does it fit into the recalculation?

Gal Gadot as Wonder Woman (Photo: Globus Group)

What will the future of HBO Max look like?

In a report by Warner Brothers Discovery, it was revealed that the total number of subscribers of the new company stands at 92 million subscribers, with an expectation of reaching 130 million by 2025. These numbers are quite modest, when you understand that Netflix already stands at 220 million and Disney at 138 million, but they also testify to the direction in which the company is moving. It does not intend to fight the other giants by hoarding content, but to stick to the quality label that has accompanied HBO over the years - including this year, when it garnered the most nominations at the Emmy Awards. This is also why Zaslav, in a conversation with investors, called the manager HBO content, Casey Blois, a “unicorn.” Blois and his close team have signed long-term contracts with the company, and will continue to dictate HBO and HBO Max's content choices for years to come.

Despite the losses, Zaslav revealed that Warner Bros. Discovery is committed to investing large sums to preserve HBO's position as a symbol of quality in the television market.

To this end, in the summer of 2023, it will launch a new service that will combine HBO Max and Discovery Plus.

The name of the new service has not yet been revealed, but the name HBO may continue to be at the fore.

The service will be launched in the US and Canada, before arriving in South America in the fall of 2023. A European launch is expected in early 2024, while the Asian market is expected to join in the summer of 2024. The service will expand to additional markets during the fall of 2024, and if the past teaches us anything: this is also the time when it is likely to arrive in Israel. It is not clear whether this step cancels the launch of HBO Max in Israel, which according to various reports was expected to happen this winter.

Alongside HBO's focus on quality at the expense of quantity, another important piece of news that came out of the investor call is the intention to reset the DC superhero universe.

Zaslav announced that the company had put together a team that mapped out a plan for the next ten years in the superhero universe, a move taken right out of the Marvel Studios playbook.

Zaslav confirmed that the films "Black Adam", "Shazam 2" and "The Flash" are expected to be released as planned, and other successful brands from recent years such as Batman, Wonder Woman and Superman will be rethought.

If Warner does return to an expanded universe model, the move will probably also affect the next years of Gal Gadot and Wonder Woman's place within DC's roadmap.

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