Warner Bros. Discovery CEO announces ten-year “reset” plan for DCEU

Who is the most powerful in the DC Universe? Superman? Darkseid? The Anti-Monitor? Actually, it’s Warner Bros. Discovery CEO David Zaslav, who has decreed the future of the DCU.

At Warner Bros. Discovery’s Q2 Earnings call on Thursday, Zaslav not only revealed a new structure for DC’s films to resemble Marvel Studios, but also the reasons for canceling Batgirl despite it having finished filming and was in post-production.

Along with other Warner Bros. Discovery executives JB Perrette (CEO & President, Global Streaming and Games), Gunnar Wiedenfels (Chief Financial Officer), and Andrew Slabin (EVP, Global Investor Strategy), Zaslav spent the call informing investors how differently they see Warner Bros. as a film and TV studio than the previous regime of AT&T.

In short, Zaslav spent the call de-emphasizing streaming as a cornerstone business.

“We have a different view on the wisdom of releasing direct to streaming films,” Zaslav said on the call. “We have taken some aggressive steps to course correct the previous strategy. With respect to streaming, our main priority right now is launching an integrated SVOD service.”

Zaslav detailed plans for a combined streaming service of HBO Max and Discovery+ to launch in the U.S. in summer 2023. It will expand to other markets in 2023 and 2024. (A name for this new platform was not announced.) There are also plans for a free, ad-supported version.

After approximately 45 minutes of walking investors through Warner Bros. Discovery’s financial projections — this was, to be clear, a very money-centric call, with acronyms like “EBITDA” and “ARPU” said often — the first investor question Zaslav fielded inquired about the future of DC and the cancelation of Batgirl.

A New DCEU?

Zaslav answered by paying lip service to the historic library at Warner’s disposal, and name-checked DC specifically. “Our ambition is to bring Warner back to produce great, high-quality films. As we look at the opportunities we have broadly, DC is the top of the list for us,” Zaslav said.

He continued, “We look at Batman, Superman, Wonder Woman, Aquaman — these are brands that are known everywhere in the world. And the ability to drive those all over the world with great stories is a big opportunity for us.”

In one of the only times that Zaslav mentioned competitors, he revealed DC will have some kind of structure similar to the one holding up Marvel Studios.

“We have done a reset. We’ve restructured the business,” he said. “We’re going to focus where there will be a team with a ten-year plan focusing just on DC. It’s very similar to the structure that Alan Horn and Bob Iger put together very effectively with Kevin Feige at Disney. We think that we could build a long term, much stronger, sustainable growth business out of DC.”

Alan Horn recently came out of retirement in June to work as a consultant to Zaslav at Warner Bros. It seems Zaslav hired Horn to figure out how to make DC a stronger competitor to Marvel. One of the biggest differences between the entities in their film business was DC’s lack of an auteur producer, such as Feige, to implement narrative and stylistic continuity across movies and streaming TV shows.

Continued Zaslav on the call, “We're going to focus on quality. We're not going to release any film before it's ready. The focus is going to be, ‘How do we make each of these films as good as possible?’ DC is something that we think we could make better and we're focused on it now.”

Why Zaslav killed Batgirl

To that end, Zaslav bluntly explained why it pulled the plug on Batgirl despite how far the movie was in production. Shooting for the movie ended in March 2022, and the movie was in the editing suite until Warner Bros. Discovery made the shocking announcement to simply not release it at all. Not even on HBO Max, which is where the movie was intended.

“Strategically, we've looked hard at the direct-to-streaming business,” explained Zaslav. “We’ve seen, luckily, by having access to all the data, how direct-to-streaming movies perform. And our conclusion is that expensive direct-to-streaming movies, in terms of how people are consuming them on the platform ... is no comparison to what happens when you launch a film in the theaters.”

He added, “And so this idea of expensive films going direct to streaming, we cannot find an economic case for it. We can't find an economic value for it. And so we're making a strategic shift.”

Budgeted at under $100 million, Batgirl, which was to star Leslie Grace (In the Heights) in the title role and helmed by red hot directors Adil El Arbi and Bilall Fallah, was scheduled to release on HBO Max at in 2022. (A specific release date was not announced, which is now telling in hindsight.) The movie also would have co-starred Michael Keaton reprising his iconic Batman, and Brendan Fraser in the role of villain Firefly.

An April 2022 story by Puck indicated Warner Bros. Discovery briefly considered giving Batgirl a theatrical release and would commit more money to the film’s post-production budget to warrant the big screen. But as of this week, Zaslav has deemed Batgirl unfit to leave the Batcave.

As if stomping on Batgirl’s cape, Zaslav waxed poetic about the romance of the big screen experience, which remains an unavailable option for immunocompromised people amidst the Covid-19 pandemic. “Our focus will be on theatrical,” Zaslav affirmed. “When we bring the theatrical films to HBO Max, we find they have substantially more value. That’s why most people move to Hollywood. That's why most people got in this business, to be on the big screen when the lights go out. That is the magic. And the economic model is much stronger.”

The fate of HBO Max

On the call, Zaslav said he intends to continue supporting HBO Max, though there are changes coming.

HBO Max will seemingly no longer host everything Warner’s made and will license out less marquee titles to other platforms; Zaslav did not specify what those titles will be.

Zaslav also revealed that it intends to make HBO Max “broader,” and it will do so by implementing some of the reality content at Discovery+. “Our strategy is to embrace and support the incredible success HBO Max is having,” Zaslav said, “We think it’s an extraordinary asset and an extraordinary advantage.”

Outside of hyping new releases like House of the Dragon, Zaslav didn’t confirm what existing HBO Max shows are “safe” from cancellation, and which aren’t (or equally harsh, be forced to find a new home on a different platform). The fate of HBO Max hits, like DC shows Harley Quinn and Doom Patrol and cult shows like Warrior and Station Eleven remain unknown.

What the future holds

While nothing is changing about HBO Max or the DC cinematic universe right now, that might change tomorrow.

HBO Max isn’t getting dismantled or sold for parts like some media analysts and critics speculated on Twitter. But the influx of Discovery+ content to the platform means HBO Max’s home page will soon be crowded with Discovery’s reality shows — stuff executives themselves described as “lean back, comfort viewing,” which contrasts HBO’s “lean in, appointment viewing.”

As for DC, the new structure teased by Zaslav means there might be some resemblance to the rival Marvel Cinematic Universe. That could mean everything from an organized slate, like Marvel’s “Phases” to a real franchise name. (“DC Extended Universe” was never official.) While a hard canon reboot may or may not be in the cards, there’s at least commitment to making sure the DC Universe doesn’t enter a crisis, lest it be of the infinite variety.