“We Made the Right Decision”: A Chat About Movies and HBO Max with Jason Kilar

Jason Kilar
Photo by Dominik Bindl/Getty Images
Matthew Belloni
January 9, 2022

You probably noticed WarnerMedia C.E.O. Jason Kilar doing a bit of a victory lap this week. AT&T revealed on Wednesday that HBO and HBO Max hit 73.8 million subscribers worldwide in 2021, beating the company’s 70-73 million target. AT&T didn’t detail the linear vs. digital split, or the U.S. vs. overseas breakdown, so it’s not totally possible to gauge the impact of “Project Popcorn,” Kilar’s controversial experiment of dropping Warners’ 2021 movies on HBO Max in the U.S. on the same the day that they were appeared in theaters. And who knows how many Max subs will churn when consumers realize that they aren’t getting exclusives, like Matrix and Dune, in 2022? Still, in a year HBO Max has gone from streaming also-ran to serious player.  

Jason offered to chat with me about the numbers, but he made the media rounds, so I figured I’d wait until after his other interviews posted to hopefully ask what wasn’t asked. We talked later in the week about the legacy of Project Popcorn, an update on WarnerMedia’s spinoff to Discovery, the CW sale, whether he’ll push The Batman due to Covid, and what he might do next after the spinoff closes (spoiler: he wouldn’t tell me). I trimmed and edited this for space and clarity.

Matt Belloni: I was among the critics of Project Popcorn, and I still have questions about it. But it’s clear that you did what you set out to do you: Raise HBO Max subs, beat the number, survive the pandemic. Are you doing a victory lap now?

Jason Kilar: It’s trying to provide context for the numbers. We took understandable heat from a number of people. But it’s hard to argue; we made the right decision. We served the customers, the fans. We partnered with theaters; we were the only ones to provide 18 theatrical features with full marketing spends and full global theatrical releases. And we worked with our [talent] participants to make sure they were taken care of.

But let’s look at the tradeoff. Hundreds of millions of dollars in payments to participants; Warner Bros. had zero movies in the top 10 at the domestic box office; angry talent. You did provide product for theaters, but if you look at what happened over the holidays to films like King Richard and The Matrix Resurrections, they were busts. Do you at least acknowledge that value has been drained from other parts of the company to support your strategy?

That’s too simple of a statement, Matt. Look at West Side Story. Tremendous film that had an exclusive global theatrical release, and that film would have performed differently a decade ago. [It has grossed only $53 million worldwide.] Your analysis is missing a lot about the kinds of films that pull people into theaters in 2021.

Sure, of course, non-franchise films have been devastated by Covid. But presumably Matrix would have been a lure, at least with bigger numbers than we saw. [It has grossed $124.5 million worldwide.] Matrix is not Marvel, but did you at least look at those Spider-Man grosses and think, You know what, that would have been nice.

Take a look [at Matrix grosses] outside the U.S., it’s a bit of an A-B test. [The film is at $34.3 million domestic and $90.2 million international.] There’s 190 worldwide markets for theatrical distribution, one of which had a 31 day window on HBO Max. Just the U.S. market. In every other market, titles were released exclusively in theaters. Take a look at how these films did outside the U.S. and compare to the U.S.

You’ve committed to a 45-day theatrical window for 2022, but so far there are only 10 films slated for a theatrical release. I imagine there will ultimately be far fewer than the 18 that you put in theaters in 2021.

What you’re seeing is a smaller number of bigger films in theaters. If you look at our [theatrical] slate, it does reflect what consumers are responding to in terms of going out and seeing on the big screen or IMAX screen. Black Adam, Aquaman 2, Flash, Fantastic Beasts: Secrets of Dumbledore, The Batman—these are larger-than-life stories. That’s what you’re seeing from us, and really anyone in the theatrical storytelling business.

But everything else? Going forward, movies like King Richard, In the Heights—they wouldn’t even get theatrical if they came out in 2022, right?

We’re thinking about things at greenlight. And we’re greenlighting a lot of motion pictures. We’re saying, “Is this a story that we think can do well in theaters?” For some, yes. But others—romantic comedies, dramas, others—those are more challenging. That’s not a blanket statement, but it’s certainly happening more in 2022 than in, say, 2012.

Given that Sony delayed Morbius from January to April, have you discussed pushing The Batman from March?

We’re certainly paying attention to everything going on with Omicron. We feel good about the date right now. We’re gonna watch it day by day.

The CW network, which is half owned by Warner, is up for sale. I’m curious if you agree with the thinking that all the media companies should sell, or spin off their broadcast networks, to focus on streaming. Like when the Murdochs spun off their low-growth print assets into News Corp. so that Fox wouldn’t be dragged down.

That’s really a financial engineering question, and it’s a question of an organization’s ability to execute across many different businesses. When you spin something out, there’s a certain valuation. Sometimes that can be favorable or unfavorable. Is it a good thing for shareholders or not? Simple numbers. On the second point, our company does quite well with executing across different businesses.

But it can drag down the stock when you want to focus on growth businesses.

The market goes through different phases. There’s the Everything must be pure play phase, and then there’s the Gosh, diversification is really good phase. So it depends. If you look at where Netflix is going—introducing mobile games, consumer products—they’re attempting to diversify their business. I think that’s smart. We happen to have a very diversified business.

How much influence do you have with the Discovery people? Like who is staying and going, for instance. I know you’re not allowed to discuss non-public information, but you have opinions, and I’m sure David Zaslav and his team want to hear some of them.

There’s two phases here. One where we are very limited on what we can say. Then as you get closer, those conversations do happen. Hey what do you think? That’s a natural part of a transaction like this.

Is it already happening?

No, but it will happen soon. David is making those decisions ultimately.

Do you think the HBO Max name will go away?

I don’t think so, but that’s a future question as opposed to a current question.

Not your problem, I get it. CNN+ is the third attempt at a CNN digital product. What will make this one a success?

I believe the most important aspect of CNN+ is the business model. A paid model. A very important piece of why HBO Max is very successful is it’s a paid model, with a recurring relationship [with customers]. More important than that is the actual product of CNN+. It’s arguably the most valuable news brand and franchise in the world. Do I think the world will respond to the most valuable news brand in the world with a paid, conveniently accessible service? I think the answer is yes.

You’re expected to leave the company when the spinoff closes. What do you want to do next?

Matt, I promise to call you first when…

Oh, stop. I think we’re done.

I promise!