HBO Max is in solid shape, and it’s likely to stay that way. The impressive tide of HBO originals will continue flowing. In-demand content from Discovery brands like HGTV and Food Network will soon be folded into its library, broadening the potential audience. Warner Bros. Discovery CEO David Zaslav is moving aggressively to put the streamer on a path to profitability, which should reassure investors and help revive the company’s sagging stock price if he succeeds.But rather than any of that, the press cycle this week was dominated by Warner Bros. Discovery’s jaw-dropping decision to shelve the nearly completed “Batgirl” movie, which Warners no longer plans to release in theaters or on HBO Max.The logic in doing so, as Zaslav explained on Warner Bros. Discovery’s Thursday earnings call, was to reinforce the company’s new film strategy, which will return to a theatrical-first model and eliminate direct-to-streaming movies from the equation.“We cannot find an economic case for it, we cannot find an economic value for it,” Warner Bros. Discovery CEO said of releasing films directly to HBO Max. “We’re not going to launch a movie to make a quarter, and we’re not going to put a movie out unless we believe in it.”Reports have also indicated that company leadership determined “Batgirl” did not measure up as a prospective theatrical tentpole, and that taking a tax write-off for the film would be a better financial move than releasing it to streaming.This is all well and good, in theory, but sometimes, incredible as it may seem, finances aren’t the only calculus that should be at play. Because even if the financial reasoning was sound, the execution of the decision was a totally unforced error.From a public-relations perspective, the “Batgirl” move was a huge blunder, generating a wave of controversy, negative press and ill will toward Warner Bros. Discovery in the lead-up to the earnings call. The optics were disastrous: canning a $90 million movie with a Latina lead while Zaslav takes home a nearly $250 million pay package, with “Batgirl” directors Adil El Arbi and Bilall Fallah learning of the decision while at El Arbi’s wedding.The cancellation has already come to represent a new level of bean-counting commerce ruling the day in Hollywood, and its true costs have yet to be seen. For all of Zaslav’s reported efforts to woo talent, how many A-list filmmakers will be eager to work with a studio that canceled a movie so close to the finish line? Granted, the “Batgirl” situation was a unique one, and unlikely to be repeated with future films. But the damage has been done, and Zaslav and Warner Bros. Discovery will have to move quickly to mitigate the fallout in the creative community.“Batgirl” wasn't the company’s only unforced error this week; see, for instance, this graphic from the earnings presentation that was (deservingly) widely mocked and criticized on social media. Observers also discovered on Thursday that several “Max Original” movies had been quietly removed from the service, along with HBO series including “Vinyl,” “Mrs. Fletcher” and “Camping.” (The movies are still available on VOD platforms; as of this writing, the TV shows are not.) While the titles removed were hardly the most popular, the image of Warner Bros. Discovery as an eraser of supposedly permanent library content will be tough to shake off. Once again, the cost of this maneuver will take time to fully manifest.It's unfortunate that Zaslav’s clumsy execution has clouded the sound logic of many of his business strategies. A quality-over-quantity approach to content (the initial tack taken by Netflix and signature strategy of HBO) makes sense, as does pivoting away from direct-to-streaming movies in favor of theatrical windows, which have proven effective even in the streaming era.Zaslav is also emphatic about the need to diversify revenue streams besides direct-to-consumer, a wise move as investors increasingly question the long-term future of streaming. He seems determined to move forward from the chaotic regime of former WarnerMedia CEO Jason Kilar, who was ousted in the Warner Bros.-Discovery merger.Ultimately, however, Warner Bros. Discovery can only blame itself for the bad PR surrounding it at the moment. If Zaslav really wants to undo Kilar's legacy, he’ll have to do better than repeating some of his predecessor's moves — like making a major film-related decision without informing any talent ahead of time.
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