As WarnerMedia Hires a New CEO, We Are Watching Old Hollywood Explode

Nobody knows anything, but Jason Kilar is the new-model leader who's charged with figuring it out.
Jason Kilar
Soon-to-be former WarnerMedia CEO Jason Kilar

When AT&T President and COO John Stankey chose former Amazon executive and Hulu founder Jason Kilar to serve as CEO of Warner Media, neither man could have fully grasped the dramatic circumstances that would greet his April 1 hiring announcement. Certainly, it was always going to make an impact: It’s an enormous job to manage the brands led by Bob Greenblatt (WarnerMedia Entertainment, including HBO), Ann Sarnoff (Warner Bros.), Chief Revenue Officer Gerhard Zeiler (Sales and International), and Jeff Zucker (News and Sports, CNN).

And yet, there’s more. The 48-year-old Kilar, who founded video streaming service Vessel and served on the boards of Univision and DreamWorks Animation, oversees only one media conglomerate (however large). His hire speaks to a tectonic shift in the entertainment industry even while it’s in a state of suspended animation.

The global economy is in free fall, theaters are closed around the world, at-home viewers are apparently happy to spend $19.99 on first-run movies, and Amazon and Netflix are racking up eyeballs. Kilar’s hire is the realization of a new Hollywood that’s been lying in wait for years, one that’s been accelerated by the pandemic but certainly wasn’t caused by it.

It’s one in which the theatrical vs. streaming is no longer the debate. After more than a century of stasis and slow evolution, Hollywood is finally forced to realize that clinging to old ways is the surest path to irrelevance. That doesn’t dismiss theatrical — everyone is pulling for its survival — but media companies that continue to view it as the alpha and the omega are more than out of touch; they’re consigning themselves to history.

“Wow, we’re in this unique moment of time where it’s never been more important to lean into the future and invent that future,” Kilar told Variety. “For me, this is more about what the next 10 years looks like, as opposed to what the last 85 years have looked like. I actually believe this isn’t about WarnerMedia; it’s as much about Disney and NBCUniversal and others. I actually think these companies are going to look so different within the next decade out of necessity and out of opportunity.”

Unlike so many changing of the guards, this one is not about Machiavellian career advancement or job security. Everyone is scared, and urgent about securing the future. (And departing Disney CEO Bob Iger, who early on closed down cruises and amusement parks in Asia and Europe, clearly saw what was coming to America.) While it shouldn’t take a global virus to shake the industry into an existential crisis, that’s what we’ve got.

On this week’s Producer’s Guide podcast, former studio executive-turned-producer Todd Garner and The Wall Street Journal’s Ben Fritz brainstormed about some possible things to come. For example, what might happen with the recent lifting of the 1948 Paramount Consent Decrees, which abruptly separated the major studios from their theater chains (“major” meant a studio with theaters), creating a seismic disruption at the time.

The Wall Street Journal’s Ben Fritz podcasts from home.Todd Garner

While many people view studios as doggedly old-fashioned and hidebound, it’s the theater chains that dug in their heels as entities forced to live or die on brick-and-mortar real estate and ticket and concession sales. The studios hung onto lucrative ancillary windows for short-term revenues for as long as they could. But in recent years, the synergistic partnership between studios and theaters, which establish the value of movies for other markets down the chain (DVDs, VOD, Pay TV, TV, airlines and hotels) has become painfully stretched.

Many studios, from Disney and Universal to Paramount, tried to learn from experimenting with shorter windows and faced strong pushback from theaters. After the pandemic, with many leveraged chains reeling from the recession, there may be opportunities for the studios to get back into the exhibition game. It could be in their interest to buy a chain, and try out different release patterns and marketing strategies. In the old studio days, everyone was in it together, figuring out clever ways to lure customers to theaters. That could happen again.

Although the studios are experimenting (and trying to make a few bucks as theaters are closed) with at-home price points on PVOD, they need the theaters. It’s still the best way to make their money back on tentpoles. But with the old-world order thrown to the winds, all sorts of possibilities could open up for indies and studios alike as they try new things. “You might see more movies,” said Fritz, “released in interesting diverse ways.”

And unlike his Hulu days, when Kilar pioneered subscription service Hulu Plus and clashed with his multiple studio owners (NBCUniversal, Disney, and Fox) who threatened to sell it, WarnerMedia is not the only studio jumping headlong into digital media. That is Kilar’s medium, and he’s ready to ride it.

Kilar starts May 1. We don’t know exactly what the world will look like by then, but it’s safe to bet that he won’t be the only one trying out new ideas.

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