Remember Jason Kilar? After the insanity of 2022, the WarnerMedia CEO’s exit following the Warners-Discovery merger last April seems like a relic from another time. However, he’d like to make sure he’s not forgotten: In an op-ed for the Wall Street Journal, Kilar wrote his predictions for the streaming business. Among his prognostications: There’s room for three major streamers and that’s it.
“No more than three global entertainment companies are likely to attain the streaming-service scale required — 300 million global subscriptions at an average of $15 per month — to generate attractive cash flows,” Kilar wrote. “Expect two or three major mergers and/or acquisitions involving entertainment companies in the coming 24 months as a result.”
It’s not all bad news, however. “Given the unusually large addressable market and the relatively fixed cost of content at scale, I believe the streaming cash flows of the leading companies will eventually be north of $10 billion a year, far greater than what most entertainment companies have each historically generated.”
Some may question Kilar’s power to see the future: This is the guy who decided to put the entire 2021 Warners theatrical slate on HBO Max day and date. Your mileage may vary as to whether that was the right move, but there’s near-universal agreement that he would have done better to give his partners a heads up.
Kilar also predicts that sports leagues will forgo channel exclusivity to take advantage of streaming, while cinemas will continue to specialize through amenities and formats like IMAX. He also believes that certain TV episodes — specifically naming “Game of Thrones” prequel “House of the Dragon” — could receive theatrical releases and that movies’ theatrical windows will be based solely on consumer demand.
“While 2022 may initially enter the Hollywood financial history books as the terrible, horrible, no good, very bad year, a more accurate interpretation over time could be that we are simply witnessing a beloved industry in the most critical moments of a high-stakes transition from one century of growth into the next,” Kilar wrote. “One thing is for certain: It has all the ingredients for a great story.”
Kilar served as WarnerMedia CEO for two years from 2020 to 2022, joining the company shortly before the Warner Bros. Discovery merger began. Prior to his time at the company, Kilar was best known for serving as the CEO of Hulu from its founding in 2007 to 2013.