WarnerMedia CEO Jason Kilar has an instinct for disruption.

The media executive has made a lasting impact at every company where he has worked. He first cut his teeth at Disney, helped transform Amazon in its early days, and was the founding CEO of Hulu.

In aggregate, his experience represents a clear knack for jumping at opportunities to transform media right at the moment when people are receptive to tide-turning change.

Kilar spoke with Greylock general partner David Sze as part of Greylock’s Iconversations series about his track record of trailblazing through his 30 years in the media industry. They discussed his track record of trailblazing; the lessons he’s learned along the way; and what he anticipates for the future — even in a time of immense change.

Kilar has an eye for, “What’s right for the customer in the long run, and where the puck is going, not where the puck is today,” as Sze says. For starters, founding Hulu and developing original programming while Netflix was still shuffling DVDs, as well as making the industry-shifting call mid-pandemic on behalf of WarnerMEdia to simultaneously release films to streaming and theaters. That vision is embodied in his mission for WarnerMedia: “To move the world through story.”

Here, they discuss the nuances of balancing customer experience and business demands; why fearing new, competing formats is often — if paradoxically — detrimental to success; being ready to take risks to stay nimble; and what Kilar can’t wait for viewers to watch next year.

Listen to the conversation on the Greymatter podcast here.


Watch the interview on Greylock’s YouTube channel here.

Episode Transcript

David Sze:
Hi, everyone, thank you for joining us for another installation of Greylock’s Iconversations, where we speak to the innovators and great changemakers in technology, media, and our entire world around us.

I’m David Sze, a general partner at Greylock, and I’m thrilled today to have our guest Jason Kilar, who’s the CEO of WarnerMedia.

I’ve been lucky enough to work with Jason and have known him for a number of years now. Jason has spent three decades in the media industry. He’s worked for almost every major media company, and seen and led incredible innovations all along the way. He started his career at Disney, and then moved on to Amazon in the early days. He was there for a decade and was involved in a lot of innovation and change there.

He then was the founding CEO of Hulu. Of course, now Hulu is a dominant player in over-the-top television programming. But we’ll talk about how Hulu was perceived at that time, which many people have probably forgotten, but I remember very well.

He served on the boards of DreamWorks Animation and Univision, and he co-founded a video service called Vessel, which I was involved with in 2013 and which we sold to Verizon in 2016, and he joined Warner in 2020.

Throughout his career, Jason has ridden multiple waves of innovation, and, in many cases, he spearheaded them and pushed the disruption. He launched Hulu before Netflix had even gotten into streaming and was still shipping DVDs. Under his leadership, Hulu became the first company to start original programming — which now, of course, has become the center of many of the services’ products and really, the future.

Jason was also involved in many of the products and business innovations that happened during his time at Amazon. He’s listed as the inventor on nine patents related to digital media and digital advertising.

Philanthropically, Jason also spends a good amount of time on some very important things. He serves on the board of Management Leadership for Tomorrow, where he’s been for over a decade. We both share John Rice as a good friend and [are] incredible supporters of the amazing work that’s done there. He also serves on the board of Habitat for Humanity International.

Jason has continued to trailblaze in his current role. In 2020, in the midst of the mayhem and the terror of pandemic that threw all businesses in everyone’s lives into all kinds of disarray, he took the incredibly brave and innovative move to break the mold and make “Wonder Woman 1984” available on the same day and date both in the theaters and at home, when we were all stuck at home and theaters were barely open.

Then a month later, [Warner] announced that the entire slate for 2021 would be released that way. It marked a major milestone for the industry that had been talked about and rumored and considered for decades, but no one had had the bravery or the moment in time to take that move, and Jason really spearheaded that.

It reflects what I’ve seen, which is Jason’s constant thirst for innovation — his willingness to make bold moves and take big risks when he knows it’s the right thing to do, even if it’s not always the most popular thing to do.

It comes from what I’ve seen over his career and working with him, which is an obsession about what’s right for the customer in the long run and where the puck is going, not where the puck is today. When Jason talks about the customer, he talks about that in the broadest sense: the customer as the user, the customer as creator, as artists, the customer as distributor, the customer as exhibitor, and also the end consumers, of course.

Today we’re going to talk about the relationship between media organizations and all those customer constituencies, and also how it has fueled the various shifts in the industry.

We’ll also explore how media has been influenced by our increasingly on-demand world, and how the industry overlaps with other businesses like technology and transportation. Lastly, we’ll hear some of Jason’s predictions for what’s next.

With that rather lengthy introduction to a rather lengthy and important career, I welcome Jason Kilar to Iconversations. Jason, thank you so much for being here.

Jason Kilar:
Happy to be here, David.

It’s great to see you.

Like you, I’ve seen a lot of changes in consumer-facing industries over the course of my career, mostly from the technology side toward the media side. You’ve done both directions, and much of it starts from changes in consumer behavior and expectations.

But then there also are major events — like we’ve seen over the last two years, or the last year and a half — which have profound impacts on media technology and the on-demand economy.

So let’s start there, and then we can work our way back into some really interesting parts in your career and how we got to where you are today. So, first, what’s your overview or assessment of where the media industry is today, in your mind?

As you said in your opening comments, David, I think it’s in a period of change. You refer to the pandemic, and you’re right in saying that it really upended every industry. I can’t think of an industry that it hasn’t upended, and there’s no doubt that it absolutely has changed the storytelling industry, which is the one that we’re in at WarnerMedia.

Obviously, a lot’s been written about it in terms of: What does it mean for exhibition and theatrical attendance? What does it mean for streaming? What does it mean for production? The short answer is: It means a lot for all three of those things, plus a lot of other things that we do, like video games and whatnot.

So I’d say that, in terms of where it’s at right now, my opinion is that with the proliferation of screens, and having access be as easy as it ever has been in the history of media — that’s a good thing for a storytelling company, because it means that if you lean into those screens, you can be far more accessed than you were before.

Not only that, you’re able to do it in a way where you can have a direct relationship with the customer.

So those are probably two things, David, that I would just tee up, because I know that this conversation will probably go a lot of different ways, and I’ll follow your lead. But I’d say the proliferation of screens, and the ability, for the first time in the 98-year history of this proud company of WarnerMedia, to have the opportunity to go directly to consumers. Which, historically, we haven’t had that opportunity. So those are two things I’m particularly excited about.

Those are amazing shifts. I think back in the early days, when you would pay for movies, mostly on-demand at a hotel, there was a question of whether you would ever be able to do anything like that at home. The early interactive television trials of Time Warner and others in Orlando, to where we are today — it’s almost mind blowing.

For you to have been there from the beginning and through it in different ways, this is really a wonderful opportunity for us to talk about that arc of change.

So why don’t we step back now. There’s a lot that’s taking place due to a whole bunch of different factors, including what media consumers want, and how they want to pay for it — or who’s paying for it.

But a lot of things actually happen when people like you and your teams make decisions to lean into them, and I’m curious about that process. I think it’d be helpful to hear about your experience at different places you’ve worked, and how they shaped your outlook and the decisions that you make today.

Why don’t we go all the way back to Disney. It’s interesting, because, obviously, you’ve been so entrepreneurial during your career, and yet you started at what was at the time (and what still is) one of the largest and longest-standing incumbents. Talk a little bit about that decision, and what you learned there and took away that may have contributed to what we see in how you think about the world today.

Absolutely. I promise I’ll answer the question about Disney, but I have to mention, David, that you’re one of the few people on the planet that I could have a conversation with and you actually know about the on-demand trial in Orlando that Time Warner did way back when. So kudos to you. You’re literally one of probably five people that can speak about that. So that’s fantastic.

Well, we know even more: While we’re on it, we’ll touch on one more step. They simulated the thing by having people on roller skates with VCRs, putting the VCR tapes into it. It wasn’t actually on-demand. It was people running around using VCR tapes to simulate it. So that just tells you another level of how far we’ve come.

It’s amazing. I love that roller skate story.

So in terms of your question about Disney, I was a kid growing up in Pittsburgh that couldn’t have been further away from storytelling and technology, yet I adored both.

So to your question as to why I was very fortunate and lucky to work at Disney as my first real job, well: It was because I wanted to learn from the best, and when I was a kid, Disney very much set the standard in terms of theme parks and storytelling and all the things that were going on there. And it was very much a founder-led company for a lot of its history, by Walt specifically.

I was just fascinated about that as a kid, and I tried to do everything I possibly could to learn, in Pittsburgh, about this entrepreneur. I bought every book I could find, I read every article I could find. Then I just tried my best to get an internship at the company, and thankfully, after a lot of letter writing and doing some crazy things to get their attention, I was able to get an internship.

That led to my first real job, where I could learn from this company and this entrepreneur (that had long since passed) to try and basically get a foundation for my career. So that’s the reason why I went to Disney way back when.

It is true people think about Disney as, obviously, a huge, massive incumbent, and it’s only grown dramatically under Iger’s leadership. Incredibly so, with adding the Marvel franchises and all the other franchises. But it really was the innovator in the early days. It was the change agent; it was the creative driver. Even in Eisner’s time, he had an incredible amount of talent that was brought in and worked together, and there was a lot of innovation and strategy work that was being done around the changes in the industry.

So it’s funny. It is an incumbent, but it is a place where you learn the foundations.

“Disney is a place that always had to innovate. You don’t survive for as long as they do by just being staid and not taking risks.”

So I think that’s exactly right, and it probably provides a great foundation for understanding the future by looking at the past.

Now, let’s go to the future. You made a shift in 1997, and you jumped to Amazon, which is a dramatic difference. You went from a big incumbent that was an innovator, but dominated the industry by the time you were there, to a tiny company — and actually left media and entertainment, such as it was. At that time, [Amazon] was a tiny company that was basically selling used books online when the internet was just getting started.

Talk about your time there, the culture, what you learned from that. I know you did a number of launches, and how much the company changed during that time. What caused you to decide to go from Disney over to Amazon, first of all? And then what was the experience there?

Well, I’ll start by sharing something that most people don’t know, which is Jeff Bezos the entrepreneur was heavily inspired by Walt Disney the entrepreneur. So that was a shared love that he and I both have had about following this great entrepreneur from the early 20th century.

So for me, in many ways, I always knew I wanted to go into entrepreneurial ventures. And certainly, learning from what was — and still is, I’d argue — a very entrepreneurial company in Disney, I then really wanted to get close to the mettle, and as close to a startup as possible.

It was funny, because as I was coming out of graduate school, I was either going to start my own company, or there was a professor at Harvard Business School that said, “I got a better idea. Why don’t you go and jump into a startup, and that way you can learn what it entails, and then you can go start your own company down the road.”

So, long story short, he said, “I know you love media, and I know you love technology. There’s this book-selling company out in Seattle, and I’m writing a case study on them.” And at the time, there were only 17 team members when this professor was writing the case study.

He said, “But the guy who is running it is a really sharp guy, and I think you would get along.” So that was a connection that the professor made, and that led to me flying out to Seattle and basically falling in love with this little startup that I just felt I needed to jump on board, if they were going to be able to make me an offer, and thankfully they did.

I was so glad I did it because it literally was an exercise in entrepreneurialism — an exercise in focusing on the customer, as you said. It was just a tiny little bookstore at the time, and not a lot of revenue, and certainly not a lot of people. But there was a lot of conviction that there could be a better way when it came to selling books to people. Then, ultimately, selling a lot of other things to people — and it kind of went from there.

So what was the culture like? And what were the things that you took away from both the culture and Jeff Bezos? You went into this incredibly vibrant moment in time in the world and the internet, and at this particular company that’s obviously in the center of it — and at the early days, was at the edge.

I was working at Excite, one of the early search engines, and we were like, “Well, maybe we should be Amazon because everyone comes to our search engine to search for a product, but selling books, that doesn’t sound so interesting. So we’ll let them do that.” Then we blink and now look at what it is today, and Excite no longer exists.

So the culture is funny. At the time, it was still very much a toddler in terms of its gestation. I think it’s fair to say that we were all still trying to figure it out, but the seeds of the culture that you know today, in terms of Amazon, were very much present. And that’s a testament to Jeff and his vision and his conviction about what he wanted to build, along with a lot of other great people.

“The thing that was the hallmark of [Amazon’s] culture was this clear focus on the customer, no matter what, combined with long-term thinking, combined with a passion for inventing.”

So I think those three things were present in 1997, and they’re still present into 2021. It’s really fun to see how it’s manifested itself in very different ways, in very different industries.

But if you condense it, in terms of what the seeds of it were and have been — it really is a focus on the customer above all else, and a passion for inventing and thinking long term.

It’s amazing. I think that is true, and I see, having worked with you, that’s been instilled in you.

I also think it’s interesting how culture ends up being a combination of very high-level perspectives on how to run a business like you were just describing, or cultural aspects at a high level, but it also ends up being calculated in the stories that the company tells about itself, or the ways that a company acts at a micro level.

I remember the classic story of: They couldn’t have meetings that are larger than the number of people that could eat a pizza.

I remember working with you at Vessel, where you brought some of those things, too, which was another small example of, like: Well, let’s write the press release that we’re going to do about this product before we do the product. Because if we can’t distill it into something that’s compelling — and explain it and make it compelling to the public — then we shouldn’t build it, or we’re not ready to build it.

I remember thinking, “it’s kind of weird and hokey to write a public press release on a product.” That’s antithetical to the engineering culture of: Let’s just build something great, and everyone will come. But it’s an incredibly powerful way [to think] and it instills a sense of: We’re building for the customer, and if we can’t explain that, then we’ve got a problem and let’s think about why we’re building it or whether we’re building it right.

I remember I even learned things from you about that culture — or the memo. Talk about the memo that starts a meeting.

So the memo is basically — it used to be and it still is, for most companies, [that] the PowerPoint deck is the main tool.

The tyranny of PowerPoint.

The tyranny of PowerPoint. And there were many things that weren’t good about it, that we figured out over the years. It was very dependent on the quality of the presentation, meaning the presenter. So if they were dynamic and charismatic, they could win over the room, but it might not be for the right reasons. It might be because they’re just a really good salesperson as opposed to—

VCs never fall victim to that problem. We’re not entrepreneurs.

Never. Never. So what the memo does, the six-page narrative, is it forces the presenter to put their thoughts in writing. And an incredible thing happens when it’s just you and the printed page and a narrative: All the weaknesses are exposed, all the strengths are apparent, and it forces a level of rigor and thinking and discipline that is not required for a PowerPoint. There’s nowhere to hide when it’s just your prose and your thinking.

So what happened when we transitioned the company to no more PowerPoints, only six-page narratives, is the caliber of thinking went way up. It required a hell of a lot more work for the presenter, because writing a six page narrative is far more tough to do than to write a PowerPoint.

Then the last thing, which I think is a fantastic output of it, is that that document can live on when the presenter is no longer present.

So you can send out the narrative to everybody that couldn’t attend the meeting, and say, “Hey, this is what this topic is about. Here’s the rationale, blah, blah, blah,” and it just is a much more efficient way to get information out in front of a large number of people, versus, say, a PowerPoint deck where so much is lost through interpretation and presenting skills.

It’s amazing to see, and you think about how Google is famous for writing down everything. I’m involved with a company called Nextdoor, and they picked up things from having worked at Square, where Sarah Friar was the CFO, where their decks have these amazing narratives behind them. They have these written narratives that are 600 pages long. They’re getting massively long, but they force the rigor, and they’re shared with the entire company.

So it unifies everyone around it, and it becomes a history that’s really important.

I remember coming to some of the first board meetings with you, and you’d hand out these papers and you’d say, “OK, we’re going to spend the next 10 minutes quietly reading,” and I was like, That sounds like a weird use of time for us, but it’s really powerful. It forces the board member to engage and get on the same page, and it also causes everyone to be focused.

So when you start the meeting, everyone knows the whole arc. You don’t have that weird thing where the people in the room who are getting it for the first time are waiting for the punch line or jumping ahead or trying to figure it out. Everyone hits the ground running in the same way, in this intense way. I was always really impressed, and noticed that you took those things away and thought about those.

We have one question, actually, from the audience here that’s related to this. From Brandon Hill, the CEO of one of our companies called Vori. He asks, “How did Jason think through early Amazon Marketplace and Prime strategy when there were no e-commerce playbooks written?”

It’s a great question. Yeah, for sure. I’ll share with you my biggest learning or insight, whatever you want to call it with regards to marketplaces.

Marketplaces that are successful are incredibly valuable, and, not surprisingly, a lot of entrepreneurs want to create marketplaces, because if you can do it, it can be worth a lot of enterprise value. What we learned at Amazon is that it’s one thing to say you want a marketplace and then another if you have a right to actually build a winning marketplace.
I’ll give you two tales of this.

The first, which was a failure for us, is when we looked at eBay and saw a company that was growing like a weed through their auction business, and was adding a lot of selection that Amazon didn’t have at the time. And we always knew that we wanted to have our selection. So we were looking at eBay like, Wow, that looks pretty good. They’re able to add all this selection overnight.

So we, of course, did the thing that was ultimately a mistake, which was going to create a “me too” product, which was an auction site called zShops, and then a general auction marketplace. And it failed big time. The reason why it failed is that we didn’t have anything really to offer the suppliers of that marketplace. They gave us the benefit of the doubt for a couple of months, but then they were like, “I’m not getting enough business here. I’m going to go back to eBay.”

Whereas what changed, the thinking for us was, we took a deep breath, licked our chops, and basically said, “OK, what can we do here?” Well, it turned out what we could do is we could actually provide something that would be of interest to book buyers, which is how we got into the used book business, because Amazon got started as a new book retailer. And, thankfully, we had a lot of success with that.

So a lot of people that were interested in books came to Amazon. The big insight for the birth of Amazon’s marketplace was: “Don’t get distracted by what eBay is doing.” Instead, ask yourself, “What can you do for suppliers that you uniquely have a strength in?” And what we had a strength in was book buyers. So we then said, “Well, wait a minute, why don’t we welcome people who have used books, and they can actually put those used books in front of interested book buyers?”

That was the connection, the insight that led to a successful marketplace.

Now, it was a tiny marketplace at the start — new books and used books — but it then expanded very aggressively into music and video and kitchen products and consumer electronics. It was a much longer road, and it took decades, but it was the right road for us, because we failed miserably with a general auction approach and strategy — which was just trying to be eBay, which we were never going to be successful at.

It relates back again to this idea of being customer-obsessed, but also understanding the interplay between what the consumer wants, and what they give you permission, or what you have permission, to do, and what you’re able to do — what your skills allow you to do, versus trying to be someone else that you’re not. So that’s a great response. Thank you for taking that question.

Let’s talk a little bit about Hulu. That was a big move, going from Amazon. Just the way going from Disney to Amazon was a crazy move, going from Amazon, which was now on a run. It went from a place that was selling books to a place that sells everything, and you said “OK. I’m leaving there, and I’m going to go do this thing where we’re going to pull together all these studios that are notoriously hard to work with separately, if not together, and we’re going to try to create this service that’s over the top that no one believes in.”

I remember people were just — there was like a death watch for Hulu. There were articles that were mocking the concept, saying it would never work. I remember — again, we’ve all been through this, the classic pain of naming — the naming thing. People would mock the name. It’s just like people mocked eBay for its name.

These things now, we think of these as like, “What a great name that was!” And at the time I remember people were giving you a huge hard time about the name, even.

Talk about why you decided to take that risk, taking on what a lot of people thought was an impossible task, and how you went about doing that.

So there’s this great saying, that you know David, very well, which is: Value is created at the intersection of non-consensus. That was a moment where I felt very, very strongly about something, and it was certainly a non-consensus view.

I thought that, if you could aggregate premium television and movies, and be able to bring it directly to consumers over the internet, whenever they wanted, wherever they wanted — and keep in mind, in 2007, this was a very, very odd point of view to have — I thought that could make for an incredibly valuable customer experience, which in turn could create a lot of value for artists and creators and distributors and owners of intellectual property.

Not many other people thought that at the time, and so it was very much non-consensus and as you said, most people who were very, very wise about the industry at the time thought it was a stupid idea and that it was, of course, going to fail.

Yet, I kind of go back to that kid in Pittsburgh that I was talking about earlier, where I used to get off the school bus every afternoon and race home to watch my favorite show at the time, “Speed Racer,” and I would always get home at like 3:07, so I’d always missed the first seven minutes of that dang show, and that was very frustrating for me.

So, believe it or not, my conviction for why I thought Hulu was ultimately going to resonate was going back to the frustration I had for so much of my life, where I couldn’t watch my favorite television shows when I wanted to. That really was a great unsolved problem, at least it was in my life, and I thought that other people probably had that same frustration.

So that began a crazy adventure, which, as you said, led to putting a bunch of names on a whiteboard and circling Hulu and then hiring an unbelievable team to go out and try and prove people wrong. Now it’s sitting on what looks like a $50 billion valuation and I’m very, very proud of everything that’s happened over the years with regards to Hulu.

You should be. You touched on another thing, which we saw at Vessels: You have an amazing team around you, and you attract great talent, and you’re able, when you do that, to change the world and take hills that people don’t think you can take. So congratulations, and it is an amazing story.

After Hulu, you started Vessel. That was acquired by Verizon, and then you went on a number of boards. You’d been on some boards in the media industry, we talked about DreamWorks Animation, Univision. You also went on the board of health benefits start-up Brighter. Habitat for Humanity we mentioned; Wealthfront, the financial services company; and then Opendoor, where you are today. Talk about that period, and then: How did you get drawn back in and decide to take the role at WarnerMedia in 2020?

It’s interesting. With Hulu, the construct of it was — and this was also subject to immense criticism — it was a joint venture. So it had a lot of people in the boardroom who were typically very strong competitors of each other. Somehow, someway, we navigated that successfully, to be able to create something that ultimately could thrive despite a very unusual contract of joint ventures with direct competitors.

After we got Hulu to scale, Richard Tom, who was the CTO of Hulu, and myself said, “Hey, wouldn’t it be fun if we went off and created something new and different?” So that’s what we did with Vessel and, as you referenced, we ended up selling it to Verizon. And in parallel, I sat on a number of boards, some of which I still sit on today, like Opendoor and Wealthfront, for example.

To your last question about, then, how did I decide to jump back into it in the context of Warner, well, that was a pretty straightforward one, which is: I got a phone call and an invitation to head out to Jackson Hole, Wyoming, to go and have a lunch with Randall Stephenson, who was CEO of AT&T at the time, and he put the topic of WarnerMedia on the table.

On my flight back to California, I really just thought about — in my career, the way I’ve made key decisions has always been: Where can I have the biggest impact, positive impact, on this world, with the gifts that God’s given me? And it really just comes down to when you’re at those points of intersection.

For me, at least, I tend to optimize and choose for the path where I feel like there’s the highest potential for me to have the most positive impact in the short time that we’re all here on this planet.

When I looked at the sandbox of WarnerMedia, which includes HBO and CNN and Warner Brothers and Warner Brothers Games, and all these different franchises and beloved worlds and characters like Game of Thrones and DC and Harry Potter, for me, it wasn’t a hard decision. I felt very strongly that I think there’s the highest potential to make a positive impact on the world by going in that direction. So that’s why I’m here, and that first lunch ended up being quite consequential in terms of my life.

It’s been amazing. In a short time, you walked into Warner, and the pandemic hit. You inherited an HBO Max product that was like three quarters of the way out. There’s a bunch of stuff that was already in process. A culture, again — a long, long culture, often known, historically, for being very siloed and pretty complicated.

Talk about how you approached entering into that, how the pandemic hit and how you adapted to that change, and [how you] decided to make some of the really brave decisions that you made.

Well, it’s interesting. Probably the best analogy I could make, David, is that, for a company that has a 98-year history, and has about 30,000 full-time team members, and probably another 30,000 that are working on television shows and motion pictures, it’s more like a big ocean liner, as opposed to a tiny little speedboat.

What I mean by that is, when it gets ahead of steam, boy, is it powerful, and it literally is one of the most impressive things to see happen. But if you’re looking to make change in terms of direction, you have to be thoughtful, and very self aware about what it’s going to take to turn that big ocean-going vessel.

I’ve always tried to keep that in mind as I’ve been thinking about the things that were very — and are very — important for the future of WarnerMedia for the next five decades.

The mission of WarnerMedia is, very simply, to move the world through story.

I could not be a bigger believer in that. It means a great deal to me, and I would go to the ends of the world for that mission, and everybody else here feels the same way.

So with that as the foundation, if you go back to when I first jumped into the role, there were a number of things that were very important for us to accelerate, which were to lean into the consumer by going direct to consumer and going global.

That was something in my first several weeks, as I got to know people and I got to understand the things that were going on, I just felt that having a bit more urgency around going direct to consumer and going global was very much in order. So I made some changes in terms of the organization, which I couldn’t be happier about.

The team is excelling incredibly well with this new structure. We launched in 39 countries just a couple of months ago, throughout Latin America. We’re going to be launching in another fair bit of countries, I should say, over in Europe, in the balance of this year.

And then a whole bunch more coming in 2022: the elevation of HBO Max, leaning into direct to consumer with CNN with a new service that we’re working on called CNN+, and then also the elevation of games and interactivity, which I think is going to be absolutely a hallmark of WarnerMedia for the next five decades.

These are the things that we’ve been working really, really hard on in addition to these amazing large, core businesses that, of course, we’re very well known for across television channels, and theatrical exhibitions and a host of other things. I’ll pause there, because I have a feeling you have a follow-up question.

No, I’m just interested. It relates, actually, to the thread of being consumer focused in all the stops. Learning at Disney, seeing it and living it and acting in it at Amazon and then Hulu, and all the way through Warner Brothers.

How do you think about the trade-offs when the different customer constituencies are potentially at odds? For example, a classic one with the internet would be the trade-off between consumers’ user experience and advertisers’ demand for what they want.

In the present world, and in Hollywood at a place like Warner or any of the players, there are incredible pushbacks inside, pushbacks between the cable customer, the distributor, the customer, the artists, and the end user. Are there any ways, rules of thumb, or things that you use to think through when your customer focus ends up with a conflict?

It’s a great question, David, and I’m smiling just because there’s a whole lot of nuance, and this alone could be a long conversation. But I’ll shortchange it by saying that, in my experience, at least, if you don’t start and end that debate with the customer — meaning the person who’s buying a ticket to a movie theater or someone who is buying a subscription to HBO Max, someone who’s turning on the channel to watch CNN — if you don’t start and end the debate with that person, I think it’s a recipe for ultimate failure or ultimate disruption by someone else.

“If you don’t start and end that debate with the customer, I think it’s a recipe for ultimate failure or ultimate disruption by someone else.”

Because if you’re not solving for that, you really don’t have, I think, a long term viable business because someone else will serve that need, and then everything else will fall apart eventually.

So I’d say that you’re absolutely right to tee-up that this is a very, very important threading of needles — and it’s successive needles that you have to thread. But I do believe there’s a way to do it, and HBO Max is a great example of that, where we have advertising in a version of HBO Max, and we thought the right thing to do was have the least amount of advertising on the market, which is about four minutes per hour.

The response from consumers is very positive. While the advertisers would love to buy twice as much of it, versus what we actually have because we have limited amounts, we’re seeing much more efficacy in terms of the advertising that they do have a chance to run on HBO Max. And, not surprisingly, we’re able to charge much higher prices because of that efficacy. So again, if you start and end the debate with the end customer, you usually end up in a pretty good spot.

Thinking back in your career now, as we talk about that, you’ve always had a good instinct of jumping into the industries right at the moment of the disruption or the change — sometimes that you knew was happening, with the case of maybe Amazon and the internet, sometimes unexpected, [like the] pandemic, that causes that opportunity to really come to the fore.

Because I think I agree with you that, if you start there and work back, eventually, that’s going to be the winning answer. Sometimes we’ve seen periods of time in history where systems have fought against that. They eventually lose, and timing matters, but you also happen to have a really good instinct for jumping into industries right when that timing moment happens — and having the bravery to make the change that is inevitable by that view and that focus.

So congratulations to you, by the way, while we’re on it.

If you have not followed Jason’s Twitter feed, I would encourage you all to. It is such a wonderful examination of all the passion that he feels for Warner, all the history of Warner. It’s like a personal tour guide: The CEO has access to everywhere in the entire organization, whether it’s going into the back rooms to the costumes or whether it’s the launches internationally, and being in the room when they happen.

That was a really joyous thing, and you brought it to life by your travels across Europe and across the world for those launches. So thank you for sharing that with us and everyone, it is definitely my version of must-see TV today. It really humanizes and brings a real sense of the richness and the history and the power of media — but also of Warner in particular.

Let’s push a little deeper in the ways that media is currently being disrupted. We talked about how you have this instinct for jumping into it the moment when the change is happening and becoming a change driver.

It has been such an extreme amount of change in the last four or five years.

People talked about these things, but from original programming being done by service providers like Hulu and then Netflix, to being the dominant providers of that — and in some ways becoming, increasingly, the dominant redistributors and providers — have it in a weird kind of combination, [with] the sort of Cambrian explosion, if you’re a content creator, of demand for your product across all these different services, and the related Cambrian explosion of those services.

So as a consumer, thinking about: Well, do I subscribe to Netflix and Disney+ and Peacock and Hulu and etc., etc., etc. Should I stay with a cable company, or am I a cord cutter, or a never-corder?

It’s such a different world, and it’s moving so fast. How do you think about where that goes? Can the world support so many services? Is there eventually going to be some sort of consolidation, or is there going to have to be some rationalization? Will consumers be wanting to expand?

We did see, with the internet, people expanded places they used it. The time was able to grow larger than people initially thought, because they used it on the bus, they used it when they’re waiting in their doctor’s office, etc. I’m interested in how you think about those changes, or what’s your perspective on that world that we’re in right now, in the wonderful mid-early stages of this change, where we see so much change in format, but we don’t know where it’s going and where it’ll be. Any insights for us, or thoughts?

Well, I don’t know if they’re insights, but I will certainly share thoughts, which is that I don’t think the current construct is going to be sustainable over the next several decades. By that, I’m referring to your question about all the different services that you’ve described and their various players.

My belief is that, if you were to jump into a time machine and get out a decade from now or 15 years from now, what you’re likely to see is a relatively small number of services that have achieved global scale, and are able to thrive by confidently, and with conviction, investing in ambitious storytelling.

By that I mean scripted, unscripted documentaries, and perhaps sports for some of those players. But I think it’s going to be a small list of folks that are ultimately going to get to the other side of that river.

I’m biased, of course, but I absolutely believe that WarnerMedia — given the intellectual property sandbox that we have, the brands that we have, and most importantly, the people that we have — I feel very, very good about our ability to get to the other side of the river and be one of those on the shortlist of players that is a must-have in terms of if you want to be moved through story.

It’s funny, David, that you bring up this whole notion of expanding the time that consumers might have to actually want to be moved through story. You’re absolutely right that it has expanded over the last several decades because of the internet and because of the introduction of mobile devices, but yet, at the same time, there’s been the introduction of new entertainment formats, whether it’s TikTok or Twitter or whatever the case may be.

That’s competing for time as well, because there are only 24 hours in a day. So it really does come down to those moments of truth. How many consumers choose you to entertain them and to move them through story? Obviously, that’s what motivates us each and every day.

It’s funny. You brilliantly anticipated my next couple of questions, so I will have to adjust here. I would just say one comment, also. You’ve obviously been right in the middle of it; I’ve been an observer and a fan. I had my Racer X poster, so we can go all the way back to the “Speed Racer” part of that and age ourselves again.

All the way up through being involved with media, mostly from the technology side, I think I would agree with you, too, that if you look at the history of media there are these moments of change that come either because it’s the right moment or something forces it. People take risks and they’re laughed at, excoriated, or whatever, but with the benefit of time, they are looked back on and seen as the innovators and the risk-takers and the survivors, often because of that.

You can look at a Netflix and you can say Reed Hastings was laughed at multiple times or criticized multiple times, and if they hadn’t done the things they’d done, they wouldn’t be where they are today. I think the history of media and distribution has been fragmentation and then re-consolidation.

If you remember the movie theater and the movie business, there was the explosion of the independent small movie creators, and there was this wonderful Cambrian explosion and risk-taking in terms of creativity and format and storytelling. Then there was the consolidation of that back down to the strong players that had taken the right kind of risks, some of which were the traditional players that adapted fast and caught up. Others were some of those innovators that took the step forward and then adapted and kept adapting.

So I think that’s right. I think it’s going to be hard. Right now, as a consumer, trying to keep track of how many services you’re involved with — and when they start to add up, the numbers that are involved and the dollars that are involved — and the number of shows that you can keep up with, I think there’s got to be some sort of consolidation play, and that’s going to be the innovators and the smart players that navigate that, that will come out on top. And certainly Warner has the assets to be one of those players.

Because you touched on it, and I’d like to push on it a little bit harder because I think it is such an interesting difference from the past: the TikToks of the world, the user generated content. You didn’t use to have that. Distribution was controlled. The cost of creating content was so high that you really had these barriers that didn’t allow this access or this creation.

It’s just been incredible to see TikTok. We were original investors, or early investors, in Musical.ly, a company that then was bought by ByteDance, TikTok’s parents. Musical.ly was turned into TikTok and then ByteDance, to their credit, blew it out worldwide. So it’s been an amazing journey for us to watch this little company, Musical.ly, that we invested in become this dominant thing under ByteDance called TikTok and go from a world where Facebook was dominant and then Instagram was dominant and then Snapchat was dominant and then TikTok came out of nowhere and exploded.

Each time, it happened faster than the last time, and the previous format has to go away, but the new format comes in and goes so quickly. How do you think about that in a world when you’re playing with new assets, but also traditional assets, and how do you think that plays out?

I think the most important place to start, David, is by making sure that everyone knows there is no rule written in stone that says the only way that people can be moved through story is through television series and movies.

I think that’s like where you have to start, because — and this gets back to your earlier comments about being customer focused — if you just take a step back, take a breath, and say: Well, wait a minute. What are the different ways that you can move people through story? It turns out that a seven-second video that users generate has a tremendous potential to move people through story.

So, guess what? That’s legit, that’s fantastic, and obviously to TikTok’s growth, as you referenced, that’s a great example of the fact that people are choosing TikTok at certain moments of the day, because that’s a fun way to get a smile, maybe a tear, or something in between in a very, very efficient way.

I’m a big believer and a fan of TikTok and the other services that you mentioned, because it’s a great reminder that when you have open distribution, or somewhat open distribution, which the internet certainly provides, and you have creativity and the conviction to lean into the future, well, it turns out that a lot of great things can get invented.

That’s the reason, when I look at WarnerMedia and I think about our gaming business and our interactive business and the intellectual property that we’re sitting on, I get so excited about the ways that we’re able to move through the world through story in new ways, in addition to and alongside motion pictures and documentaries and television series.

“You don’t want to be so beholden to a format that you can’t actually innovate for the customer.”

I think that’s probably a big lesson that most people should learn.

I think that, again, plays to your strengths, which is: with incumbents, there’s always such a knee-jerk reaction to see something as a threat to lock down, to try to stop, to say we would never do that, but what you just described is like, Well, how do we…? Again, the consumer and the customer are clearly using this. So how do we lean into this? How do we think about this with the assets we have? How are we not threatened by it, but how do we see it as a wonderful opportunity?

You can see that already in ways that you and others are engaging in TikTok, the ones that are leaning in and trying to take advantage of it, rather than fighting it, to say, this isn’t going away. This is what the consumers are saying and what technology is now enabling for them.

So how do we make this a wonderful thing? How do we make this augment the brands that we’re creating, make them much more powerful, make them live in multiple ways? You can see this a little bit in what other players have done in terms of taking their franchises and putting them in different ways, in different formats. It actually frees you up to take, maybe, characters that would have died on the shelves, or secondary and tertiary characters of a franchise, and go and put them in different formats and have them live and thrive in those formats in ways that are kind of magical.

Your answer excites me and doesn’t surprise me, because I know innovation is something that you don’t fear, it’s something that you lean into and try to figure out. Let’s just talk about the one question, one of those fears, of: Oh my gosh, how are we going to get paid? When are the economics going to happen? Are the economics going to fall apart?

The classic starting point is: Oh my God, money, fear, etc., and then that usually stops people from taking risks. How do you think the economics will play out, or how do you think about the economics in these different channels, and for Warner?

So I’ll share a very macro statement in terms of how I think about that subject, which is: I feel very, very good that in terms of — if you’re fortunate to be one of the scalable players, which I think we are very fortunate in terms of our current position — I actually think the opportunity from a shareholder perspective is larger than it has ever been in the history of WarnerMedia.

I wouldn’t be surprised if you see a relatively small number of storytelling-centric companies that are worth $400, $500 billion each because the internet allows for a scale that heretofore was never possible. I’m not just talking about streaming business models, which of course will be very important to our future, but I’m talking about things like video games and interactivity and NFTs, and a whole host of other things that have yet to be invented.

It’s going to be those companies that have excellence in storytelling — which we have a whole heck of a lot of, thanks to this great team that is here at the company — combined with a conviction and a courage to lean into the future.

To your comment about business models, I’d say that there’s probably two ends of the spectrum when it comes to storytelling, which is: If you have to pay for the production of content, if your only business model is advertising, my experience is that’s not sustainable enough.

You really need to have a more diversified business model than just advertising if you’re in the business of paying for the production of content. On the other end of the spectrum, if you have user-generated content where, for the most part, you don’t have to pay for the production of that content, you might choose to pay the top layer or the top performers in some way, like YouTube does, and others of course have done as well. Ad-supported business models can be fantastic business models. And those are the two extremes.

You don’t want to be thinking you’re one thing, but you’re really another thing. So when I think about the future of WarnerMedia, I think you’re going to see us largely in the business where we are producing content work. We’re proudly and with conviction investing in the production of content, and we probably are going to have very diverse business models that support that.

Now to your comment, it doesn’t mean we’re not going to participate in ad-supported environments that have great reach, because I think there are a lot of kids under the age of 10 who are falling in love with Batman, Superman, Aquaman, Game of Thrones, and all these other things because of TikTok.

That’s a great entree into those characters and worlds, where then they can get, obviously, a lot more by going to HBO Max or playing a game that’s set in Westeros with interactive and gaming. That’s a long winded answer to your very simple question. So I’ll pause there, David.

No, that was great. That was a great way to wrap up, talking about the future and the balance, because these are some of the tricky things going forward that I know you’re grappling with and the whole industry is grappling with and we, as outsiders, are excited to hear how someone like you, with your stature and history, are thinking about. So thank you very much for sharing all of that.

I have one last question. I’ll make it two last questions. What are you watching right now that we could watch that you find particularly exciting? And what is coming up that you are particularly excited about, to share with us that we should look out for?

This is dangerous territory, David, because that simple question is going to cause me to feel like I have to point out one child even though I love all of my children. But I will do it just because you and I have worked together for so long and I do want to answer your question. So I’ll highlight one that anybody can watch right now, which I think is some of the finest episodic storytelling, easily, of the past five years, and that’s “Mare of Easttown.”

For those that haven’t watched, it’s something that came out earlier this year, and I think the layered storytelling, the authentic storytelling — it delivers in so many ways. It’s a seven-episode mini series, and the last episode is probably the best stick-the-landing moment I’ve seen in terms of the last five years.

So that would be my recommendation for something anybody can watch. For something that people will be able to watch in the next year, I’d say that “Game of Thrones: House of the Dragon” is something that I’m incredibly excited about.

I just got back from outside of London where I was able to walk the sets of the Red Keep and all these other great settings for that show, and the conflict and the tension and the dragons and all the things that we have in store, they’re just remarkable. I get goosebumps thinking about it. I think people are going to be blown away. The team, and the caliber of the team that is working on that storytelling right now, it’s unbelievable. I cannot wait for people in 2022 to see what we’ve got cooking.

That’s wonderful. That’s a cruelty to tell us that you get to go walk those sets. I’m so jealous. And for what it’s worth, I’ll say a couple of things. One, “Mare of Easttown,” is such an amazing show. Kate Winslet — what an incredible job of taking on and capturing the culture that she has no background in, coming from England, and it’s incredible storytelling. So I’m so happy you brought that one up.

I will also give you some cover here to say, I know from your Twitter feed that it is not one love. You love a lot of the programs, and there’s a wonderful set of them. [Such as] Suicide Squad, all the ones due and coming up and others. I know your passion for content and great product is not limited to one. So it was a bit of an unfair question. I appreciate you taking it on.

But also, check out Jason’s Twitter feed, because there are wonderful teases for some really great programs you can watch today and also programming that’s coming up.

Thank you so much, Jason, for this time. You’ve been really generous with your thoughts, and you’ve been generous with your time. It’s wonderful to see you again, as always.

David, thank you. And the other thing I just want to reiterate is that there are very few people on the planet that I can have a conversation like this with, where you really have decades of not only experience both on the technology side and the media side, but you also have a passion — a shared passion, you and I, clearly — in terms of all of this.

It was really, really fun that we’re able to go so deep, so quickly. And all of this is not just because you studied up, but because you’ve lived it. So I want to thank you for that, because there are very few people that have that level of passion about storytelling and technology and business models, but you clearly have it. So thank you for taking the time for the conversation.

It is nice of you to say. It’s one of the reasons we have so much fun together whenever we’re together. I also want to thank everyone in the audience. I hope you enjoyed this session of Iconversations with Jason. I think it was wonderful, and I always enjoy always hearing the things he has to say. They’re always so insightful and inspiring.

We would love to hear what you think. So keep an eye out in your email for a survey to give us feedback, because we’re always trying to improve.

Our next guests will be Eric Yuan of Zoom. You won’t want to miss that conversation, with Sarah Guo of Greylock. That should be a very exciting conversation as well. A different world, but another company, another business where the last 18 months has dramatically changed it and shifted its world and caused it to adapt quickly.

So, Jason, thank you one last time again, and congratulations on all the wonderful things you’re doing there, and all the wonderful programming that’s coming up. We can’t wait to watch it.

Thanks David.

Take care.


David Sze

Advisory Partner

David invests in consumer media, gaming and social platforms that have the potential to connect millions of people.

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