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WBD May Favor Local Partnerships Over Worldwide Max Rollout, Says JB Perette: We Have the IP to Be a Survivor

Warner Bros Discovery's JB Perrette warns of pain and consolidation in the global streaming market, but believes the merged group has what it takes to succeed. The company's Max streaming product will be rolled out in a pre-determined sequence, with some markets potentially being skipped in favor of local partnerships. Perrette suggests that the streaming market has gone too far too fast and needs to return to rationality and profitability. Despite the challenges, he remains optimistic about the company's strategy and content.

Warner Bros Discovery's CEO and president of global streaming and games, JB Perrette, has issued a warning about the challenges and consolidation that the global streaming market will face in the next three to five years. However, he remains confident that the merged group has the potential to be among the top five players that will survive.

To navigate the war of attrition and consolidation, Perrette suggests that Warner Bros Discovery (WBD) may choose not to engage in every battle. Instead, the company's streaming product, Max, will be rolled out in a strategic sequence, starting with Latin America and Europe before expanding to parts of Asia. However, Perrette acknowledges that in certain markets, Max may not be launched at all, and WBD may opt for local partnerships instead.

The decision to launch Max in a particular market depends on several factors. Perrette explains that if WBD believes it can achieve success and profitability, and if its market differentiation is strong enough to sustain a profitable business within a three-to-five-year timeline, then Max will be launched. However, if the market has low average revenue per user (ARPU) or is already saturated with other streaming players who are spending heavily on content and incurring losses, WBD may decide that it is not the right time to enter.

Perrette specifically mentions India as a market where Max may not be launched due to intense competition from both local and international streaming players. This tactical approach stems from Perrette's belief that the streaming market has experienced excessive growth and needs to return to rationality and profitability.

The CEO expresses optimism about WBD's ability to navigate the challenging landscape and emerge successfully. He notes that the company incurred a loss of $2 billion last year but has achieved profitability in the first half of this year. Perrette attributes this confidence to the strength of WBD's intellectual property (IP) portfolio, which includes HBO, Warner Studios, Discovery's factual content, DC Universe, and the "Harry Potter" franchise. He believes that great stories and IP are the key to success in the streaming industry.

In addition to its own content, WBD is also considering local product partnerships. Perrette highlights the potential to collaborate with existing local players to expand the reach of IP like DC franchises. By originating local IP and incorporating characters from the DC universe, WBD aims to tap into new markets and audiences.

In conclusion, Perrette acknowledges the challenges and consolidation that lie ahead for the global streaming market. However, he remains optimistic about WBD's prospects, citing its strong IP portfolio and strategic approach to market entry. The company will carefully evaluate each market before deciding whether to launch Max or pursue local partnerships. By focusing on profitability, market share, and scale, WBD aims to be among the few successful players in the evolving streaming landscape.

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