By Joe Flint
BURBANK, Calif. -- Jason Kilar might have a career as a tour guide if this WarnerMedia chief executive gig doesn't work out for him.
On a recent stroll through the Warner Bros. lot, Mr. Kilar eagerly pointed out where the James Dean classic "Giant" and the cult hit "Gilmore Girls" were shot. He shared arcane details on how big the sets are for the new show "The Sex Lives of College Girls" that Mindy Kaling is creating for the company's year-old streaming service, HBO Max. He waxed on about the artifacts in the studio's new museum, including props used in Humphrey Bogart movies and Christian Bale's "Batpod" motorcycle from the Dark Knight movies.
When an extra from an episode of "You," the Warner Bros.-produced Netflix Inc. hit shooting on the lot, approached to ask where the nearest bathroom was, Mr. Kilar had that answer too.
Being able to point out restrooms is part of the CEO's job, he joked.
Mr. Kilar, 50 years old, obtained his education in all things Warner Bros. through many solitary walks on the lot since he joined the AT&T Inc. division as CEO about a year ago, four weeks before HBO Max launched. The Covid-19 pandemic forced the studio to shut down, but Mr. Kilar -- having grown tired of conducting business from his wife's vanity table in their bedroom -- began to show up at his new office on a regular basis. He then decided the walks would be the best way to get to know his new co-workers. A former CEO of Hulu and longtime Amazon.com Inc. executive, he also oversees CNN, TNT and TBS -- all part of AT&T's $81 billion WarnerMedia acquisition in 2018.
In his first year on the job at WarnerMedia Mr. Kilar has done a lot more than familiarize himself with the company. He has led one of the most radical overhauls in the entertainment industry: undoing centurylong business practices, putting new leadership in place, slashing many jobs and attempting to turn a vaunted studio into a content factory for the company's streaming service.
That has made him a divisive figure in Hollywood. To some, he is a futurist who recognizes that WarnerMedia must change if it is to survive and prosper in the streaming era. To others, he is a shortsighted interloper whose strategy is destroying the very essence of what made Warner Bros. Hollywood's most successful film and television studio for generations.
"I absolutely respect the history of Hollywood and media, but I don't feel obligated to cut and paste it going forward," he said. "In fact, I think that would be the complete wrong strategy."
Among the criticisms of Mr. Kilar are that he has he never run a company as big and far-flung as WarnerMedia, and that his move-fast-and-break-things approach -- common in the tech world -- has alienated many employees and creative partners.
Many are also concerned about the plethora of experienced executives who have left or been forced out since his arrival. Mr. Kilar relies primarily on a small inner circle composed mostly of former Hulu colleagues who lack creative backgrounds. Others noted that Mr. Kilar's endless enthusiasm can mask a reluctance to receive input.
"I absolutely did bring in a small number of people that I've worked with before that, where I felt like we had a gap in terms of capability, in terms of subject-matter expertise," Mr. Kilar said. However, he added, he has promoted a lot of people inside the company as well: "probably far more of those flavors compared to bringing someone from say Hulu or Amazon or elsewhere," he said.
Mr. Kilar is one of several new industry leaders attempting to redesign their companies for the 21st century. At Walt Disney Co., Bob Chapek has restructured television and film operations to focus on streaming shortly after succeeding Robert Iger as chief executive. Jeff Shell did the same at Comcast Corp.'s NBCUniversal after he took over from Steve Burke.
Mr. Kilar is facing perhaps the biggest challenge. While Messrs. Chapek and Shell rose through the ranks of their companies, Mr. Kilar is an outsider coming in after two years of continued restructuring that have left WarnerMedia veterans frazzled. Throw in a pandemic that shut down the whole entertainment industry, and it's safe to say Mr. Kilar has undergone baptism by fire.
"It's hard to imagine a more daunting set of circumstances to hand an executive," Mr. Shell said of Mr. Kilar. "I think he knows what it takes to make HBO Max successful and he's done a good job."
The streaming service is the cornerstone of AT&T's plan to attract and retain wireless customers by bundling HBO Max with their mobile offerings. The communications giant is eager to avoid a repeat of its previous, disastrous foray into media when it bought satellite broadcaster DirecTV.
Legacy entertainment companies' attempts to compete directly with Netflix have yielded mixed results. Disney+ has been an instant success, with over 100 million subscribers world-wide, versus more than 200 million world-wide for Netflix.
HBO Max, meanwhile, has had a slower start since it went live last May. The pandemic shut production down and limited the amount of fresh content available at launch. The combined number of HBO and HBO Max subscribers is 44 million in the U.S. In June, HBO Max is to launch in 39 countries world-wide, the company said.
Before the launch of Max, HBO had about 33 million subscribers and its growth was stagnating. In a promising sign for the new streaming service, most new sign-ups are for Max, not the premium-cable channel. "We're not seeing new HBO-only subscribers," said Andy Forssell, head of HBO Max.
After graduating from Harvard Business School in 1997, Mr. Kilar spent nearly a decade at Amazon, helping develop the company's video and DVD businesses and rising to senior vice president. Along the way, he also became close with CEO Jeff Bezos.
In 2007, he became the first CEO of Hulu, where he often clashed with the streaming service's media owners -- including Disney and 21st Century Fox over rights deals to content that he felt hindered Hulu's efforts to attract subscribers. Disney has since acquired Fox's entertainment assets, including its Hulu stake.
"He's a disciple of Jeff Bezos, and Bezos has certain mantras of business. Bezos is all about focusing on and understanding the customer above all else," said Kevin Mayer, a media entrepreneur and former senior Disney executive who was on the board of Hulu when Mr. Kilar was running it. "Invariably when you do that you will be disrupting whatever industry you're focused on."
Mr. Kilar inherited most of the hand he is playing from his predecessor, John Stankey, now AT&T's CEO. Mr. Stankey decided the HBO brand would be the best selling point for the new streaming service, which would also come with lots of new and classic content.
HBO Max appears to have struggled to attract subscribers because of its price, even though consumers are well aware of the offering, thanks to its affiliation with one of the most prestigious names in cable television. But existing contractual agreements with pay-TV distributors meant that HBO MAX had to cost the same as the HBO cable channel, $14.99 a month. That is far more than Disney+ or Peacock, the service launched last year by NBCUniversal, and even slightly more than Netflix's most popular offering, which costs $13.99.
Just a couple of months after HBO Max launched, Mr. Kilar ousted the streaming service's top brass and put a single person, Warner Bros. studio chief Ann Sarnoff, in charge of all content to be distributed on the company's many platforms, from HBO and HBO Max to movie theaters, cable channels TNT and TBS. Previously all were run as separate entities.
That and other consolidation efforts led WarnerMedia to lay off more than 2,000 employees.
In an effort late last year to make HBO Max more attractive -- and because most movie theaters were shut down at the time -- Mr. Kilar signed off on a plan to put the entire 2021 Warner Bros. movie slate on HBO Max at the same time as their theatrical release, a move that was known internally as "Project Popcorn."
The decision -- a first for a major movie studio -- was made without alerting filmmakers, and caused a lot of ill will. Directors including Christopher Nolan ("Tenet," "The Dark Knight") and Denis Villeneuve ("Dune") publicly bashed the HBO Max streaming strategy, and Creative Artists Agency President Richard Lovett sent Mr. Kilar a letter in which he called the move "the epitome of a self-interested corporate maneuver intended to benefit your company while wreaking havoc on the industry."
The move may have stunned Hollywood, but it didn't surprise people who know Mr. Kilar well. "He has strong views on what he wants to do and when he wants to do those things, he goes and pursues them," said Andy Jassy, who worked with Mr. Kilar at Amazon and is set to succeed Mr. Bezos as the e-commerce giant's CEO later this year.
To appease the talent, Warner Bros. had to cut new deals, which cost the studio more than $200 million, people familiar with the matter said. HBO Max also had to pay high license fees for the movies.
"Our intention was to always make sure people felt fairly compensated," said Ms. Sarnoff.
During the recent walk and talk on the Warner Bros. lot, Mr. Kilar acknowledged it might have been better to give the studio's creative partners a heads up, but said it was more important for him to control the decision and deal with any fallout as it arose.
The bet has paid off so far, Mr. Kilar said. HBO Max added close to 3 million subscribers in the first quarter of 2021, and "Mortal Kombat" and "Godzilla vs. Kong," two of the highest-profile movies that became available on HBO Max at the same time as they opened in theaters, have both delivered solid box office results, considering that theaters are only now starting to reopen and seating remains limited.
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