Aug 5, 2022

Confusion reigns over the future of animation at Warner Bros. Discovery.

Warner Bros. Discovery (WBD) held a Q2 earnings call on Thursday, in the middle of a tumultuous week that saw the company make a series of high-profile movie and TV cancellations that had many worried about the future of the company's animation.

The call was introduced by Andrew Slabin, Executive vp of Global Investor Strategy, led by wbd CEO David Zaslav, and by WBD global streaming and games CEO and President JB Perrette and CFO Gunnar Wiedenfels. After the executives released the data, they received questions from investors.

Cole was not close to clearing all the questions surrounding Warner's animation plans, but one about where the company is headed.

It's all the doom and gloom of Warner Animation - people on the Internet are talking about Warner Bros. animation. It laments the demise of animation, but based on the information presented during the earnings call, the company's reports of a decline in animation may have been highly exaggerated.

That's not to say that there are no cuts, or even big cuts, in the animation production of the entire Warner Bros. brand. But a lot of misinformation and speculation seems to be floating around. In contrast to some reports and some viral social media posts, those who spoke during the call saw wide cuts across streaming and linear platforms and didn't say anything specific about children or animated content.

In fact, there have been many times that WBD executives have given hope to the future of the company's animation. While praising the virtues of Warner Bros. "DC [and] the animation group, along with the entire Warner library, are aiming to revive Warner and produce excellent, high-quality movies," said Zaslav, an IP catalog for Motion Picture Group."

"We spend significantly more on HBO Max products. It's entirely possible that Warner's team sees animation as one of the areas that doesn't offer effective returns, but I feel it's too early to assume that animation falls into that category based on the information available.1

So why is everyone going crazy - much of the uproar about Warner animation comes from an announcement called Scoob, which was nearly completed earlier this week. The third season of Holiday Haunt and Little Ellen both got the axe. With these clouds of cancellations looming, the stress can double when those watching the phone see a slide that says "course correction measures have been initiated."

Speakers may have become much clearer about where their future investment in content will go. It's hardly surprising that people are worried about the future of Warner's animation, seeing that they were not. But what we saw and heard during the call did not give a definitive impression that the animation was on Warner's chopping block.

Where does the feature-length division of the Warner Animation Group (WAG) stand – according to Zaslav, Warner's feature-length companies - like WAG - are a major part of the organization's plans for the future, but conditional. Films produced by Warner's company must be of theatrical quality, and the company releases films only when it thinks they are ready.

All Warner films get exclusive theatrical release, but window lengths may vary. When exclusive theater windows run out, Warner movies will first be available for sale or rent, and only then will they hit the streaming platform.

"When you're in the theater, the value of content and the overall viewing experience rise," Zaslav argued. "Then when the same content moves to PVOD and then streams, it rises again. As the film moves from one window to the next, their overall value rises, rises and rises.

The CEO also stressed that Warner wants to be agile in the future. That may mean that certain movies get shorter theater windows or different marketing campaigns, but the functional side of the business is always the first

What about TV and streaming - Warner Bros. Animation and Cartoon Network, Adult Swim, Blackpool, etc. What will be the future of the company's Turner network like Meran - this is where things are a bit clouded. On May 4 of this year, WBD cut the development of script programming on TBS and TNT. Questions about the future of some of the ongoing original series of these networks remain and still remain. American Dad, for example, moved from Fox in 2014 to Warner Bros. Discovery's TBS, and in 2021 it was updated for a further 12 seasons in 2 months. But WBD's new belt tightening measures on the Turner network raise new questions about the future of the show.

During the earnings call, Wiedenfels outlined a strategy that did not work for Warner under previous leadership. He said, "An incremental and loss-making content investment that is important to Turner networks. Specifically, content spending on shows that did not have a path to generate sufficient valuation or incremental monetization potential.

It sounds bad, but it's also very vague. And if a sweeping cut from the company's television division had been planned, Warner would have commissioned so many animation productions this summer- examples include two Scooby-doo series; Chelm: The smartest place on Earth from Sacha Baron Cohen, Mike Judge, and Greg Ticker. els.; Hbo Max Latin America's Batman Azteca, the indie sci-fi series Scavengers Reign and Rick and Morty's two animated series: The Anime and Ninja Kamui, and kids show driftwood and Invincible Fight Girl.

Does Warner's strategy change present a potential advantage for animation fans - for the glass half-full type, Wiedenfels' comments may indicate that shows that generate enough ratings or prove monetization potential are safe. And while talking about the abuse of legacy content, Zaslav confirmed the names of Looney Tunes and Hanna-Barbera as brands Warner aims to profit from in the future.

"We are home to many of the most iconic brands," the CEO explained in a Q&A after the presentation. We are also a standout manufacturer and seller of global content. And going forward, we will continue to invest smartly in content in a way that will grow, achieve greater market share and have a greater impact."

That doesn't necessarily mean all the classic Loony Tunes shorts or Flintstones are coming back to HBO Max or any other platform, but it seems Zaslav wants to find a way to make the most of those assets. It also sounds like an animation production that can make money for the company will have a place in the upcoming WBD.

According to Zaslav, when Warner Bros. was. "Our aim is not only to be one of the top streaming companies in the world, but also a media company that can generate financial revenue by delivering content to all platforms, and our belief has not changed.1

So, is it possible to meet Scoob? Holiday haunt and a small Ellen sometime, somewhere - it's hard to say. According to Scoob. Filmmakers, their films were 95% completed. It seems unlikely that the film will see the light of day, at least through official channels, if they are not allowed to wrap up the final 5%. But it's not out of the question to suggest that third parties like Netflix intervene to finish the movie.Netflix has already done this with Blue Sky's Nimona.It was orphaned after Disney took over the studio and shut it down.

On the other hand, Little Ellen was fully completed and was originally scheduled to premiere on May 6. With 3 full seasons, perhaps Warner will choose to find a new home for the series, and Season 3 will be released there.

The immediate availability of any of the works on HBO Max seems to be the least likely outcome given Warner's new streaming strategy.

What about DC animation - without specifically mentioning animation, Zaslav said he was keen on the future of DC, and Warner said he was trying to emulate what Disney did in the Marvel Cinematic Universe. Extrapolating from that ambition, it seems likely that animation will continue to be a major part of the DC universe.What If...- The X-Men'97, and plenty of kids show that they can help complement Disney's Marvel Cinematic Universe, even if they're not part of the official MCU canon.

Final Thoughts: We do not claim that anyone or any project at Warner is safe. But based on the information currently available and the context of the recent announcement made by the company, it feels like maybe the sky isn't falling at Warner Bros. The discovery animation is still there.