APOS 2023 Highlights | JB Perrette, CEO & President Global Streaming & Games, Warner Bros. Discovery

Well, I think the macro statement is that we went through a period of a decade of great oversupply at great underpricing, and we are in a period of rationalization. The great reaggregation is well underway. The reaggregation is both structural, obviously companies like ours in terms of Warner Brothers and Warner Media and Discovery coming together, so there's commercial bundles through partners. So that's one piece of it. I think pricing rationalization is starting again, which is ultimately, unfortunately for the last decade, the industry went on a kind of content oversupply bender. There's frankly just too much content, too much investment chasing consumer interest and consumer eyeballs, and we're back to beginning to have a more rational view of that. On top of that, as we look at the globalization of it, I think you're working towards a world where over the next 5 to 10 years you're going to end up with very positive indicators in the first 120 days of greater frequency of people coming to visit, more time spent per user, more diversity of content watched, and the habituality of people coming to the platform, which is really key for churn reduction improving. That's a good trend. The scale is obviously the third thing that will come next, and that's both in the US as well as we have not even started our rollout in international markets. We'll start in Latin America in the first quarter, we'll do Europe before the Olympics, which we have to get done because we have the Olympics coming in Paris next summer, and then we will get to Asia. I know this has been sort of critically important, but we have to just chase being the biggest from a scale perspective. If there are markets where we feel like it's uneconomical for us to enter, India is a fantastic market, we've been in that market for a long time. We looked at the market and for two factors: number one, there's some technical realities of our product roadmap that allow us to not launch; we can't launch in every market all at once quite yet as we replatform this entire offering, so there's some bandwidth practical requirements we have to measure, which is why the sequencing of rollouts across the world. Number two, as we look at the markets, if part of our measures of success is that the market is just too low or it's way overserved by a ton of other players in the market who are spending a ton on content and losing a ton of money, we may say it's just not the right time. So we love the Indian market, we have a great partnership with UD and the team and have enormous respect for them in that market, but every market will look different. We'll make that assessment as to whether we think we can be successful based on those three metrics of definitions of success that we have. If yes, great, we'll go and figure out how best to attack it. If the answer is we don't see a path, then we'll find other partnerships and other ways to go to market and monetize our content appropriately.

Yeah, I think first of all, we love the Australian market. It's an incredibly important market, both on the distribution side as well as the content origination side. We have had a long partnership with Foxtel, and Patrick and the team have been terrific. That's a market that we continue to view as very important for us, where our content in particular does extremely well. The reality is, I said earlier, we're going to be focused on first replatforming in our existing Southeast Asian markets from HBO Go to Max in 2024, and we'll probably look to launch in a market like Australia after that. Got it. Australia is a critically important market for us. That's not just in 2023 a nice thing to say. One of the areas we're also very focused on is we have great IP, like the DC franchises, where historically it's been very English language dominant, where we could ultimately bring characters from that universe and originate local IP potentially with a partner in that market. So we think it's not just invest entirely ourselves, but there may be creative ways to partner with existing local players who are great local producers to make something beneficial happen for both of us.

Here's what I'd say: I'm not focused on the others. I'm focused on us. Will you be one of them? Yes. Look, we ultimately in that space, and this is not just a year's worth of history or a day's worth. If you look at what David Zaslav, our CEO, and us as a leadership team have done, it's continue to try to innovate commercially but innovate structurally. If you think of where certainly Legacy Discovery started 15 years ago, and then the rollup of scripts, the Warner transaction, part of this is about trying to figure out a way to stay pragmatic, be flexible.