WHEN: Today, Tuesday, April 5, 2022
WHERE: CNBC’s “TechCheck”
Following is the unofficial transcript of a CNBC exclusive interview with WarnerMedia CEO Jason Kilar on CNBC’s “TechCheck” (M-F, 11AM-12PM ET) today, Tuesday, April 5th. Topics include: Kilar departing the CEO role ahead of the WarnerMedia Discovery deal closing, the future of streaming, among others. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2022/04/05/outgoing-warnermedia-ceo-jason-kilar-discusses-discovery-merger-streaming-services.html.
All references must be sourced to CNBC.
JULIA BOORSTIN: That’s right. I’m joined now by Jason Kilar, CEO of WarnerMedia, and we are breaking some news today. Jason, you just announced moments ago telling your employees that you will be stepping down, leaving the CEO role ahead of that WarnerMedia Discovery deal closing so we just want to start off with the news. Why are you leaving now? Why did you wait this long and what are you going to do next?
JASON KILAR: So to answer the first question, I’ve been here for almost a year since the deal was announced for a couple of simple reasons. One, I love the team. I love the mission. I love this company. And so, there was never a doubt in my mind that I was going to stay through the end until the transition and and that’s the short answer to your to your first question. The second question, I don’t do any grand proclamations obviously, I’d be happy to talk to you about that at the right time. I’m not going to a beach to go and reflect or retire and I’m very excited about what comes next but but right now I’m focused obviously on WarnerMedia.
BOORSTIN: Well, focused on WarnerMedia until Friday, which is going to be your last day and then we expect the company to start operating as a combined company without you at WarnerMedia. The WarnerMedia Discovery company started operating together on Monday. Just to reflect back on what you have been focused on at WarnerMedia, HBO Max and the streaming service in particular was a big focus of yours. You made the controversial decision to stream all of the Warner Bros movies on HBO max for all of 2021. And now there’s some questions if the box office is ever going to fully bounce back once consumers got a taste of that convenience. How do you think that that decision could possibly change the movie industry, and what’s next for the movie industry?
KILAR: Well, I think that over the full arc of of media’s history and this goes back to the 1940s Julia, which is the consumer always gets to make the decision in terms of where this all goes. And I do believe that there’s going to be a healthy theatrical business for decades to come, but it’s going to be different. There’s no doubt. I think you’re going to see more IMAX worthy spectacles. Those are going to be the kinds of stories that compel people off the couches. And I do believe there’s going to be a lot of convenience with regards to people watching more and more motion pictures in the home. But, but I see both happening. I don’t, I don’t see the decline of one coming at the expense of the other.
BOORSTIN: One other streaming service that you oversaw the launch of was CNN+. Jeff Zucker left and you pushed out the launch of CNN+ right ahead of this deal with Discovery closing, even though we know that Discovery is going to be offering a bundle of streaming services, you moved forward with the plan to launch this separately. Are you concerned this could undermine the potential for this to be rolled into a bundle and why did you go forward with this, this launch now rather than waiting?
KILAR: I’m glad you asked this question. So we’ve been hard at work on this for nearly two years and so so that so the timing of the launches has literally been set for about a year and a half. And it is very similar to a question which is why launch HBO Max, and you launch these things because there are in many ways the future of the business. The vision for CNN+ has always been twofold, which is to have a standalone service for those folks that are interested in a news product like CNN+, but also have the ability to have it bundled into HBO Max where you’re able to purchase CNN+ and be able to consume it either as a standalone app or as part of HBO Max. So that’s always been the vision and that hasn’t changed and I suspect that won’t change with Discovery.
BOORSTIN: Well, speaking of your streaming strategy, we’ve recently seen Disney announced that it’s going to do an ad supported option. There’s even been talk that Netflix which has avoided ads for years could even possibly be considering an ad supported option. HBO Max has an ad supported option but do you wish you had launched it sooner and do you think advertising is going to be essential to success in the streaming, in the streaming wars going forward?
KILAR: So to your last question Julia, I absolutely think advertising is going to play a central role in the evolution of streaming over the next several decades for a very, very simple reason, which is I think anytime you give customers choice and empower them to make the best decision for them, it’s a good thing. And so, what advertising does, it allows people to pay a lot less for a streaming service if they choose to do so. I think that’s a very good thing. And so, to your first question of would I have loved to launch the ad supported version of HBO Max earlier? Of course, I ,you know, I wish we had twice the size technology team to be able to do everything all at once, but I’m really, really happy that we were able to launch the ad supported version of HBO Max about a year after we first went live in the US with the ad free service.
DEIRDRE BOSA: That’s fascinating. Jason, it’s Deirdre by the way. Wonder if Netflix could potentially say something similar a few years from now if they ever go down that path. I want to go back to CNN+, I wonder if you can share any early color or any numbers from the service and how do you think that success should be measured a year from now?
KILAR: Sure. So, it’s ahead of my expectations in terms of where the subscribers are, the engagement are, the receptiveness that we’re getting in terms of people’s response to the journalism of CNN+, I couldn’t be more proud of that team. And it’s not an exaggeration, Deirdre to say that that is the future of CNN. I think anyone who does not have a scalable, robust paid business model digitally doesn’t have a very strong future and a lot of credit I’ll give to New York Times and Wall Street Journal because they have a robust digital paid business model and now CNN does as well.
BOORSTIN: There’s been so much fragmentation in the streaming space. There are just so many options right now. Now that you’re going to be leaving this space, give us your perspective on who’s gonna win. How many streamers can possibly succeed especially as we see higher churn and more concern about consumers just pulling back on how much they’re willing to pay for?
KILAR: I’m glad you asked the question Julia. I’m going to set aside Apple and Amazon simply because they have a, you know, orthogonal business models in serving retail and serving hardware devices. But I do think when it comes to the storytelling companies, there’s probably going to be three that ultimately are scaled players. We’re certainly one of them and the other two being Netflix and Disney. I think it’s going to be a very hard road for others to catch up and I think as a result, you’re probably going to see a lot of changes happening in the industry over the next several years.
BOORSTIN: Well, speaking of changes happening in the industry, David Zaslav is going to have to cut billions of dollars as he combines these two companies. What’s your advice to him on what he should do or what he should avoid to preserve some of what you’ve built and some of that intellectual property?
KILAR: I’m always a believer in that adage of if it’s not broke, don’t fix it. And I really would point to the unusually positive trajectory of HBO Max, of what’s happening at CNN+ in the early days, and most importantly, the storytelling momentum of this company. We are in a groove unlike any other in terms of how we’re resonating at the box office with the Batman and all the movies to come theatrically. And then on the series side, you know, we’re operating in a manner that I’ve never seen and I followed WarnerMedia for a long, long time so, so if there’s counsel to give, I’d say to start and end with storytelling and to stick to that knitting, and to also recognize what’s working really really well which is clearly the streaming side of the business and the gaming side of the business as well.
BOORSTIN: Still gonna have to find billions of dollars to cut though and the question is, is where he should do it. Looking, though, at your tenure at the company, is there anything that you wish you had done differently, mistakes made?
KILAR: You know, I’d say that the biggest wish I have when I go to sleep at night, which is typically late, is that I wish there were more than 24 hours in a day. And I don’t mean to be facetious when I say that Julia, I, I think as a Chief Culture Officer, I can’t spend enough time with this team. And given all the storytelling that we do, there’s not enough time in the day for me to spend with creators around the world and storytellers around the world. So so if there’s one wish I could have come true, it would be that there would be more time.
BOORSTIN: Speaking of being Chief Culture Officer, there’s been a lot of talk in the media about rival media company Disney and how it’s handled its own internal culture and this question of how it how it manages the reactions of the “Don’t Say Gay” bill in Florida. How do you think of the role of media companies to weigh in on cultural and political issues like that?
KILAR: Well, I think this is ultimately a business issue. It’s, you know, yes, there’s politics involved, but it’s also a business issue in that, you know, we strongly believe that anti-LGBQT legislation is anti-business. And we don’t think that one person’s life or one person’s identity or one person’s love is any less than or less worthy than another. So, we feel very strongly about this one and you feel that this is about business as much as it is about politics.
BOORSTIN: Well we appreciate you joining us to talk about the big news that you are leaving WarnerMedia as of Friday, and we hope you’ll come back and talk to us about what you’re going to be doing next. Jason Kilar, thanks so much. And John, back over to you.
