WarnerMedia CEO Jason Kilar “Not At All” Worried About HBO Max

CNBC exclusive: CNBC transcript: WarnerMedia CEO Jason Kilar speaks with CNBC‘s “Squawk Alley” today

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Q2 2020 hedge fund letters, conferences and more

Qualivian Investment Partners

Qualivian Investment PartnersQualivian Investment Partners commentary for the second quarter ended July 30, 2020. Q2 2020 hedge fund letters, conferences and more “Short-term investors will accept a 20% gain because they didn’t spend the time to develop the conviction and foresight to see the next 500%.” – Ian Cassell Executive Summary Readers of investment letters fall into Read More

WarnerMedia CEO: ‘Not at all’ worried about the success of HBO Max

JULIA BOORSTIN: A MAJOR OVERHAUL OF WARNERMEDIA, INCLUDING THE OUSTING OF TWO HIGH PROFILE EXECUTIVES WHO WERE TASKED WITH DEVELOPING AND RUNNING HBO MAX, RAISING QUESTIONS OVER THE PLATFORM’S PERFORMANCE LESS THAN TWO MONTHS INTO ITS LAUNCH. NEW WARNER MEDIA CEO JASON KILAR JOINS US NOW JASON, THANKS SO MUCH FOR TALKING TO US TODAY.

JASON KILAR: ABSOLUTELY, JULIA HAPPY TO.

BOORSTIN: SO JASON, I HAVE TO ASK, IT’S JUST BEEN ABOUT TWO MONTHS SINCE HBO MAX LAUNCHED ARE YOU WORRIED THAT IT MISSED ITS SHOT TO REALLY GAIN CONSUMERS IN THIS VERY CROWDED STREAMING LANDSCAPE?

JASON KILAR: NOT AT ALL. NOT AT ALL AND I SAY IT BECAUSE JULIA, IF YOU TAKE A LOOK AT THE LAST 60 DAYS BY ANY MEASURE FROM MY PERSPECTIVE WE’RE IN A REALLYGOOD POSITION IF YOU LOOK AT WHAT LAST YEAR WE THOUGHT AND HOPED WE WOULD BE AT THE END OF 2020, WHICH IS 36 MILLION HBO AND HBO MAX SUBSCRIBERS, WE JUST ANNOUNCED A COUPLE WEEKS AGO THAT WE’RE ACTUALLY NORTH OF 36 MILLION ALREADY AND OBVIOUSLY THE NUMBER IS GOING UP EVERYDAY

BOORSTIN: BUT THERE IS THIS QUESTION, THOUGH, OF WHETHER OR NOT, YOU KNOW, AS SOME TRADITIONAL HBO SUBSCRIBERS CUT THE CHORD, YOU’RE ADDING OTHERS, YOU HAD ABOUT 4 MILLION SIGNUPS FOR HBO MAX, PUTTING THAT IN CONTRAST TO DISNEY WHICH HAD 10 MILLION SIGN UPS FOR ITS FIRST DAY, PEACOCK WHICH ALREADY HAD 10 MILLION SIGNUPS ARE THOSE NUMBERS JUST WAY LOWER THAN WHAT YOU NEED TO BE COMPETITIVE IN THIS LANDSCAPE?

JASON KILAR: NO. I THINK IF YOU ACTUALLY DIVE DEEPER IN TERMS OF APPLES TO APPLES COMPARISON, ESPECIALLY ON THE NBC SIDE OF THINGS, I THINK YOU’LL SEE A BIT OF A DIFFERENT STORY BUT MORE IMPORTANTLY IN TERMS OF YOUR QUESTION ABOUT DISNEY PLUS, KEEP IN MIND THAT DISNEY IS A 100-YEAR SURGICALLY PRECISE BRAND WITH REGARDS TO FAMILIES WITH KIDS UNDER THE AGES OF 9, GENERALLY SPEAKING SO, THEY DID EXACTLY WHAT THEY SHOULD HAVE DONE AND KUDOS TO THEM OURS IS A VERY DIFFERENT JOURNEY. I WOULD ARGUE IN SUCCESS OURS IS A BIGGER OUTCOME BECAUSE WE ARE REALLY GOING AFTER ALL MEMBERS OF THE FAMILY AND ALL INDIVIDUALS. AND SO, THE OPPORTUNITY IS BIGGER BUT IT DOES MEAN THAT OUR JOURNEY IS GOING TO BE DIFFERENT BECAUSE WE DON’T HAVE A 100-YEAR SURGICALLY PRECISE BRAND AROUND FAMILIES, SPECIFICALLY WITH KIDS UNDER THE AGE OF 9

BOORSTIN: BUT YOU DO HAVE THE BRAND OF HBO. AND HBO MEANT SOMETHING VERY SPECIFIC AND THEN THERE BECAME ALL THESE DIFFERENT VERSIONS OF HBO, GO, MAX, NOW MAX AND A LOT OF CONFUSION THAT’S ONE REASONS WHY YOU’RE TRYING TO ELEVATE THE HBO MAX BRAND IN PARTICULAR, BUT WHAT DO YOU WANT THAT BRAND TO MEAN? AND HOW DO YOU CLARIFY THAT WHEN THERE’S ALL THAT NOISE ABOUT HBO AND WHAT THESE DIFFERENT VERSIONS ARE

JASON KILAR: ABSOLUTELY. SO AT THE END OF THE DAY, WE’RE LEANING INTO HBO AND TO IMMEDIATELY ANSWER YOUR SECOND QUESTION, QUALITY IS THE ANSWER WE WANT PEOPLE WHEN THEY THINK OF HBO MAX, WHEN THEY THINK OF ALL THE THINGS THEY CAN GET FROM HBO MAX WE WANT PEOPLE TO THINK THAT WHILE THESE STORIES, THEY’RE A CUT ABOVE. AND THAT REALLY PLAYS INTO THE LEGACY AND THE HISTORY OF HBO. I COULDN’T BE PROUDER OF THE WORK THAT THEY DONE AND OBVIOUSLY THINGS LIKE WARNER BROTHERS AND D.C. AND HARRY POTTER, WE’RE TALKING ABOUT A NEARLY 100 YEAR LEGACY OF QUALITY. THAT’S EXACTLY WHAT WE’RE GOING TO DO TO LEAN INTO IT. I DO WANT TO SAY SOMETHING, JULIA, YOU RAISED, I THINK IN HINDSIGHT A MISTAKE WHICH IS WE DID HAVE A NUMBER OF BRANDS IN THE MARKET THAT WERE ULTIMATELY CONFUSING, WHICH IS HBO NOW AND HBO GO WE HAVE SUNSETTED THOSE BRANDS AND THOSE SERVICES SO NOW WE ARE LEFT WITH RIGHTLY SO HBO MAX AND HBO. SO IT’S A MUCH SIMPLER PROPOSITION FOR CONSUMERS.

JON FORTT: I WONDER IF YOU CAN HELP CLARIFY HOW THE FUNNEL WORKS IN YOUR VIEW FOR HOW YOU GET IN FRONT OF THE CUSTOMER, GET THE CUSTOMER TO SUBSCRIBE AND THEN RETAIN I KNOW I’M FINDING AT HOME WE’LL OFTEN LOOK FOR A SPECIFIC PIECE OF CONTENT WE’LL DO A SEARCH. WE’LL SEE WHAT SERVICE IT’S AVAILABLE ON IF WE ALREADY HAVE IT FREE OR BASICALLY ALREADY PAID FOR AND THEN GO THERE. IT’S KIND OF LIKE A MARKETPLACE APPROACH HOW DO YOU PLAY WITHIN THAT MARKETPLACE? WHAT’S WORKING AND GOING TO WORK

JASON KILAR: WELL, ULTIMATELY WE HAVE TO DO TWO THINGS. THE FIRST AND MOST IMPORTANT THING IS THAT WE HAVE TO HAVE INCREDIBLE STORIES THAT PEOPLE ARE SEEKING OUT AND VERY MUCH WANT TO ENGAGE THEMSELVES IN SO WHETHER THAT’S SUCCESSION OR WHETHER THAT’S PERRY MASON OR WATCHMAN, INSECURE, LOVE LIFE, HARRY POTTER, YOU NAME IT BUT ALL OF THESE THINGS WE HAVE TO DO A GREAT JOB LEANING INTO THOSE STORIES. THAT’S THE FIRST AND MOST IMPORTANT THING WE HAVE TO DO. AND THANKFULLY I WOULD ARGUE WE’RE IN THE WORLD AT THAT AND I REALIZE I AM BIASED WHEN I MAKE THAT STATEMENT. THE SECOND THING WE NEED TO DO THAT AS WE DO THAT AGAIN AND AGAIN AND AGAIN, THE NAME AND THE BRAND OF HBO MAX WILL START TO LEAD CONSUMERS TO START THAT TOP OF THE FUNNEL BY ACTUALLY TURNING ON HBO MAX THAT’S WHEN WE KNOW WE’VE DONE A REALLY NICE JOB ON AN INDIVIDUAL STORY BASIS SUCH THAT PEOPLE DECIDE, YOU KNOW WHAT I JUST KNOW I WANT TO BE ENTERTAINED IN A HIGH QUALITY WAY I’M GOING TO START BY OPENING UP HBO MAX.

FORTT: AND HULU, WHICH YOU WORKED HARD ON, TURNED OUT PRETTY WELL. WHAT DID YOU LEARN FROM THAT

JASON KILAR: YOU HAVE TO START WITH FOCUSSING ON THE CUSTOMER AND THEN EVERYTHING ELSE IS JUST DETAILS. AND SO OUR BIG LESSON AT HULU BACK IN 2007 WAS EMPOWER PEOPLE AND LIBERATE PEOPLE SO THEY CAN BE ENTERTAINED, WHEN, WHERE AND HOW THEY WANT TO DON’T EXPECT THEM TO SHOW UP IN A CERTAIN ROOM OF THE HOUSE ON A CERTAIN DAY OF THE WEEK AT A CERTAIN TIME JUST SO THEY CAN WATCH A PROGRAM THEY WANT. SO THAT WAS PROBABLY THE MOST IMPORTANT LESSON, WHICH IS START WITH THE CONSUMER AND EVERYTHING ELSE IS JUST DETAILS

MIKE SANTOLI: JASON, WE’VE HAD THIS, I GUESS, UNINTENDED EXPERIMENT GOING ON WITH STAY AT HOME AND PEOPLE INTENTIVELY USING ALL THEIR STREAMING SERVICES WHAT SURPRISES OR INSIGHTS HAVE YOU GOTTEN IN TERMS OF CONSUMPTION PATTERNS, WHETHER IT’S COMFORT TV THAT’S ALREADY OUT THERE VERSUS NEW CONTENT OR ANYTHING THAT YOU THINK IS GOING TO BE HELPFUL TO YOU IN TERMS OF FIGURING OUT WHAT PEOPLE WANT DOWN THE ROAD

JASON KILAR: I THINK PROBABLY ONE OF THE BIGGEST INSIGHTS IS THAT BRANDS OR LACK OF A BETTER TERM, THINGS THAT KIND OF AGGREGATE PEOPLE, BRING PEOPLE TOGETHER, THEY MATTER MORE NOW THAN THEY EVER DID BEFORE I SAY THAT BECAUSE IN THE WORLD OF INTERNET, IT ALLOWS FOR JUST AN EXPLOSION OF CONTENT AND AN EXPLOSION OF CHOICE. THAT’S REALLY GOOD ON MANY LEVELS IN TERMS OF PERSONALLY. BUT THAT SAID IT BECOMES VERY CHALLENGING AND CROWDED. WHEN YOU’RE ABLE TO OFFER BIG, NOISY STORIES THAT PEOPLE IDENTIFY WITH AND WANT TO COME TOGETHER EVEN IF IT’S VIRTUALLY ON THE COUCH ALL OVER THE WORLD, THAT MATTERS MORE. AND SO WHAT WE’RE SEEING IF YOU TAKE A LOOK AT OUR MOST VIEWED CONTENT, YOU DO SEE PROPERTIES THAT PLAY VERY, VERY BIG “FRIENDS” IS PROBABLY THE PERFECT EXAMPLE OF THAT WHERE IT MEANS SOMETHING AFTER ALL THESE YEARS IN ADDITION TO ALL OUR NEW SERIES.

BOORSTIN: JASON, YOU, OF COURSE, ALSO OVERSEE WARNER BROTHERS. AND THE THEATRICAL BUSINESS HAS BEEN TRANSFORMED BY COVID. WE HAVE TENANT, WHICH IS YOUR CHRISTOPHER NOLAN FILM DOING A NONTRADITIONAL RELEASE AND UNIVERSAL DOING THESE 17 DAY WINDOWS WHICH IS A TOTAL TRANSFORMATION OF THE TRADITIONAL THREE-MONTH WINDOW BETWEEN WHEN FILMS WERE AVAILABLE IN THEATERS AND THEN AT HOME. HOW ARE YOU GOING TO BE APPROACHING THAT SHORTER WINDOW? AND WHAT WILL THAT MEAN FOR YOUR THEATRICAL BUSINESS?

KILAR: WELL, FIRST AND MOST IMPORTANTLY AND YOU’LL NOTICE A TREND HERE, IS THAT WE’RE GOING TO START ALL OF OUR DECISION MAKING FROM THE PERSPECTIVE OF THE CONSUMER THAT IS THE ONLY WAY TO GO IF YOU ULTIMATELY WANT TO BE SUCCESSFUL SO WITH REGARDS TO WHAT THAT MEANS, IT ABSOLUTELY MEANS THAT IN SOME CASES WE’RE ABSOLUTELY GOING TO EMBRACE A THEATRICAL RELEASE WHEN WE’RE ABLE TO AND CLEARLY WITH TENANT WE’RE SO EXCITED ABOUT THAT, THE MOVIE IS UNBELIEVABLE I’VE SEEN IT IT IS JUST — SO WE’RE VERY, VERY EXCITED ABOUT WHAT WE’RE DOING SURGICALLY, JULIA, AS YOU SAID AROUND THE WORLD TO GET THAT IN FRONT OF PEOPLE IN A FANTASTIC, CUSTOMER EXPERIENCE BUT THERE WILL BE OTHER SITUATIONS WHERE WE MAY DECIDE TO GO DIRECT TO CONSUMER THROUGH HBO MAX. WITH 120-MINUTE STORY. AND THAT’S OKAY BECAUSE AT THE END OF THE DAY IF YOU KIND OF START WITH THE CUSTOMER, THINK ABOUT THE BEST WAYS WE CAN SERVE THEM, I THINK WHAT WE CAN SEE GENERALLY SPEAKING IS US AGGRESSIVELY LEANING INTO THEATRICAL BECAUSE IT’S A GREAT CUSTOMER EXPERIENCE BUT IT’S ALSO FAIR TO SAY THAT THOSE WINDOWS ARE GOING TO BE SMALLER. I THINK THAT’S APPROPRIATE BECAUSE THAT’S WHAT THE CONSUMER HAS BEEN SAYING.

BOORSTIN: SO DOES THAT MEAN THAT YOU’LL BE OFFERING FILMS AT HOME JUST THREE WEEKENDS AFTER THEY WERE IN THEATERS JUST LIKE UNIVERSAL?

JASON KILAR: WELL, I CAN’T SAY WITH ANY SPECIFICITY. I CAN DEFINITELY SAY THAT IF YOU WERE TO COMPARE THE NUMBER OF DAYS THAT A WARNER BROTHER’S TITLE WAS IN THEATERS OVER THE LAST DECADE VERSUS WHAT WILL HAPPEN OVER THE NEXT DECADE, JULIA, I BELIEVE THE NUMBER WILL A BE A FAIR BIT SMALLER. I THINK THAT’S A BETTER CUSTOMER EXPERIENCE AND ULTIMATELY OUR JOB AS EXECUTIVES IS TO MAKE SURE THAT THE THEATRICAL —

BOORSTIN: AND I HAVE TO SAY BECAUSE YOU DO ALSO, OF COURSE, OVERSEE TBS AND TNT AND YOU JUST FIRED KEVIN REILLY, WHO OVERSEES THOSE OR DID OVERSEE THOSE BUSINESSES, WHAT’S GOING TO BE YOUR APPROACH TO PROGRAMMING THOSE CABLE CHANNELS ESPECIALLY IN LIGHT OF ALL THE QUESTIONS ABOUT THE FUTURES OF SPORTS

JASON KILAR: WELL, SO KEEP IN MIND, WE’RE ABSOLUTELY LEANING AGGRESSIVELY INTO OUR CABLE CHANNELS. SO, THE CHANGES THAT YOU’RE REFERRING TO, JULIA, KEEP IN MIND WE’RE ELEVATING CREATIVE EXECUTIVES IN THE COMPANY SPECIFICALLY CASEY BLOYS AND SAY SARAH AUBREY AND CASEY, JUST TO TALK ABOUT HIM, YOU’RE TALKING ABOUT SOMEONE WHO HAS BEEN AT THE TOP OF THE INDUSTRY CREATIVELY FOR THE LAST TWO DECADES. HE AND HIS TEAMS HAVE GENERATED MORE EMMY NOMINATIONS THAN I PROBABLY HAVE HAIR FOLLICLES ON MY HEAD. YOU SHOULD SLEEP WELL KNOWINF THAT THE CABLE CHANNELS ARE VERY WELL LOOKED AFTER.

BOORSTIN: JASON, NOW, JUST A FINAL QUESTION ABOUT SUMNER REDSTONE WE LOST A MEDIA MOBILE, A TITAN IN THE MEDIA SPACE TODAY REALLY FAMOUS FOR SPLITTING UP CBS AND VIACOM AND OF COURSE THEY RECOMBINED. HOW DO YOU THINK ABOUT HIM AND HIS LEGACY AND PERHAPS WHAT YOU’RE THINKING ABOUT THE NEED FOR MORE CONSOLIDATION RIGHT NOW?

JASON KILAR: I THINK — THE LESSONS THAT SUMNER HAS TAUGHT US ARE LONG AND CERTAINLY LONGER THAN THIS TIME ALLOWS. I WILL SAY, JULIA, ONE OF THE THINGS THAT I WAS ALWAYS MOST IMPRESSED WITH IN TERMS OF HIS LEADERSHIP WAS HOW TENACIOUS HE WAS. THIS IS ON THE STORIES OF HIS TENACITY FROM PERSONAL TRAGEDY, HANGING OUTSIDE THE BUILDING THE MIDDLE OF THE FIRE IN BOSTON, TO THE TENACITY THAT HE LEVERAGED AS HE ASSEMBLED AND THEN CHANGED HIS ASSETS FOR LACK OF A BETTER WORD THIS IS AN UNUSUAL LEADER. THIS WAS AN UNUSUAL LEADER I THINK WE CAN ALL LEARN A LOT IN TERMS OF KIND OF WHEN TENACITY IS PUT FORWARD IN THE RIGHT WAY IT’S AN INCREDIBLY POWER THING IN TERMS OF SERVING CONSUMERS.

BOORSTIN: WELL, JASON, WE APPRECIATE YOU TALKING TO US TODAY AND WE HOPE YOU’LL COME BACK AND FILL US IN MORE AS YOUR BUSINESS CONTINUES TO EVOLVE. THANKS SO MUCH

KILAR: THANK YOU, JULIA.

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