The Wizeguy: All About That Debt

It has been a little over a month since HBO cancelled its original sci-fi series, Westworld. And now, reportedly it will be pulled from the streamers catalog along with other Max originals Love Life, Minx and The Nevers. So, these violent delights have violent ends was really the tagline of HBO Max? That makes more sense than Westworld ultimately did.

I’m assuming this is how it all played out…

Underling: “Wow the White Lotus numbers are great! We’re gonna make a lot of money on this one. Season 3 is going to rake in even more”

Zaslav: “Cancel it.”

Underling: “What? It’s one of our most successful properties…”

Zaslav: “Also delete the existing show from our servers. No one sees it ever again”

Underling: “Sir, but the shareholders will…”

Zaslav: (snorts a fat line of coke, rips open shirt) “Then find the Emmys it won last season and melt them down for scrap metal. Hire a hitman to assassinate Mike White. DO IT! NOW!”

David Zaslav (WBD CEO) is reminding me more and more of the 80’s guy from Futurama who didn’t know Planet Express was a delivery company before he bought it. Basically, he was brought in to smother HBO Max with a pillow. The Batgirl thing I could conceptualize as a viable way to take a tax write-off and save some money, but this just seems counter-productive. Just because something isn’t wildly profitable doesn’t mean it’s not still worth something. Maybe it is, to someone else.

The thing in stake, particularly for HBO, is that a show can get low ratings if it brings some positive coverage, and subscriptions. The Wire or Treme were shows that “nobody” watched, they didn’t win a lot of Emmy Awards, but they generated enough buzz for HBO to order additional seasons. These were shows that kept a small, but important, number of people subscribed to HBO because they did want to see all episodes as they aired, because they were “proud” in some way to have a subscription to the premium cable network that had the best shows on TV, even if they don’t watch them.

A show such as Westworld started its life as a hit, both in ratings and buzz terms, then slowly slid into irrelevance, up to the point its presence on a streaming service may not get them any new subscribers. And I suppose that Warner must have precise stats on engagement rate, about the actual number of HBO Max subscribers who start watching, and keep watching, the show these days, which must be quite disappointing, as they don’t justify paying the fee to keep it in the library. Westworld has outlived its usefulness at HBO Max.

I’m not at all defending Zaslav here, but some of it is the harsh reality of any business. The current team had inherited from ATT a production lineup that put emphasis on producing as many shows as possible, to gain market share against Netflix and the other services, regardless of the debt that was piling up. A corrective course was a necessity. The current management is doing this in a ham-fisted way, but when you’re $53 billy in debt, sacrifices will be made.

My guess is WBD under Zaslov believes they’d make more money selling the streaming and broadcast rights of their shows and movies to other companies than continuing to put it on their own platform (HBO Max). The bigger story is that the studios are finding it challenging to make money from owning and operating their own streaming platforms. Most of these shows were co-productions. So presumably they had to pay Bad Robot something for Westworld or Mutant Enemy for The Nevers etc. All of these choices are penny rich and pound foolish, as they help solve the crippling debt issues the company has in the short term, but will have long term reverberating consequences.