The fallout of the HBO Max and Discovery merger, Cartoon Network’s 30th anniversary, and a scary future for the industry
It’s the beginning of August 2022 and just another normal day on the internet. There had been some grumbling throughout the year around the merger of HBO Max and Warner Media. Some questions were whispered about Cartoon Network. October 2022 is Cartoon Network’s 30th anniversary, so some fans in animation circles wondered what was up with the lack of promotion and new content on HBO Max’s streaming platform.
The trouble began to brew in April as Warner Bros. Discovery merged with HBO Max to become Warner Bros. Discovery. A common thread began to run throughout all of the chaos, and that was Discovery CEO David Zaslav.
The first indication was the sudden cancellation of big named movies. The two that got the most press were Batgirl and Scoob! Holiday Haunt, both of which were near completion. This was confusing for a lot of people. Why cancel two films that were almost finished? It didn’t make a lot of sense. A representative for Warner Bros. Discovery released a statement on Twitter saying:
"“The decision to not release Batgirl reflects our leadership’s strategic shift as it relates to the DC universe and HBO Max. Leslie Grace is an incredibly talented actor and this decision is not a reflection of her performance. We are incredibly grateful to the filmmakers of Batgirl and Scoob! Holiday Haunt and their respective casts and we hope to collaborate with everyone again in the near future.”"
The directors of Batgirl, Adil El Arbi and Bilall Fallah, released a joint statement of their disbelief this happened in the first place stating:
"“We are saddened and shocked by the news. We still can’t believe it. As directors, it is critical that our work be shown to audiences, and while the film was far from finished, we wish that fans all over the world would have had the opportunity to see and embrace the final film themselves. Maybe one day they will insha’Allah.”"
Things were scary during this time. As reported by Cartoon Brew, one of the major news websites that follows animation, Scoob! was 95% complete as it was slated for a holiday release. Another canceled children’s show, Little Ellen, had a completed third season that was ready to go and it was axed without warning. It was reported from an investor call with Zaslav that this merger was going to be a “course correction.”
Some of this “correction” was the next hint that something bad was brewing. Warner Bros. Discovery suddenly laid off 14% of HBO Max’s staff. These people were about to join many more creators as the new course had devastating consequences for the animation community.
Days later without any warning, Warner Bros. Discovery gutted over 30 titles from HBO Max’s library. Some of these were classic Sesame Street specials as well as The Not-Too-Late Show with Elmo. Many were staples of Cartoon Network which, again, is celebrating its 30th anniversary this year. Many of these shows had completed seasons ready to go like Julia Pott’s Summer Camp Island. Cartoon Network shows like Infinity Train, OK K.O.!: Let’s Be Heroes, and Mao Mao: Heroes of Pure Heart especially got a raw deal. Not only were they taken off the HBO Max catalog, but all of their social media accounts were removed. Any music on streaming services was taken down except purchase sites like iTunes. For Infinity Train, the pilot episode was available for free, which had over 5 million views, and was taken off of YouTube. Also, these creators also can’t put these shows in their portfolios. They don’t own the shows. HBO Max owned them. And with the deletion, there’s now nothing to show for their work.
Infinity Train’s creator Owen Dennis wrote a long article on his blog detailing how they had absolutely no warning. This was devastating for creators across the board who voiced their anger at the entire thing.
But the question was why? Why would Discovery and David Zaslav do this?
Was it because the shows were underperforming? This was one explanation given by Discovery. Like how Netflix loves their data, a lot of these streaming services don’t have to share how a show is doing with viewers. Many creators don’t have a good idea if their show is succeeding. And also as Owen Dennis pointed out in his article, none of the live-action classic movies from the ’30s-60s in HBO’s catalog were cut. He stated:
"“…it’s hard to believe that Shock Corridor, Mystery of the Wax Museum, The X From Outer Space, Ice Station Zema, Red Sonja or Captain Blood, while all fantastic movies in their own rights, are being “frequently watched”. So clearly, it’s not frequency, therefore it must be something else.”"
The underperforming explanation is such a slap in the face as Amphibia creator Matt Braly pointed out as much in a long thread on Twitter. He stated:
"“What really bothers me about all this HBO/Netflix treatment of animation is the narrative that these shows weren’t profitable and thus, cutting them makes sense. We are not business people. Our responsibility as creators/artists was to make great content. The responsibility of the studio/network is to monetize it. Yet we are the ones being punished for the complete failure of another department. Most of these cut shows were never even given a CHANCE to make money. There is never a revenue source that can be directly tied to a new IP. No toys, no books, no games- no chance to even prove they could be profitable. Historically our value on a linear platform was to keep ratings steady, or grow them. That could be tied directly to the millions being made via advertising and partnerships. It’s a fuzzy relationship at best, and doesn’t directly link the IP to profit, but it was something. So what happens if you don’t even have that? Well, on a streaming service, because things are 1000x more competitive than linear, you can’t just do well anymore, or good. You have to do EXCEPTIONAL. Your show has to spike and prove beyond a doubt, that subscribers are hooked. Hard to do when you are a new IP going up against Star Wars! Bottom line is that animated shows, especially new/recent IP have not been given any chances to succeed. Companies made zero effort to monetize our hard work- many of these shows weren’t even advertised. Anywhere. All WE can do is continue to fulfill our end of the bargain – making great content. But for the love of GOD these studios/networks need to try harder to set us up for success and come up with some kind of business model that helps us…(gasp) make them money.”"
Toby Jones who was the executive producer of OK K.O.!: Let’s be Heroes whose series was one of the victims of the HBO purge responded to Braly’s Twitter thread:
"“Early in my career, I asked a showrunner what factors made a difference in whether a show (or even a single episode) does well in ratings. He said the ONLY thing that really matters is if it’s promoted. Promotion = good numbers, no promotion = bad numbers. It’s not rocket science”"
It’s a horrible, vicious cycle that, like with Netflix, streaming services do to these creators. These companies do not promote their series, they do not make merchandise for them, and then these CEOs turn around and punish the creators for the company not doing its job. It’s a horrible way to do business.
To follow up, even more cancellations rolled out like with the highly anticipated movie Driftwood from Cartoon Network as well as the in-the-works series Batman: Caped Crusader and upcoming Looney Tunes specials. While I am personally upset over Driftwood because it sounded like an excellent new project, the Batman one doesn’t make any sense. It has big names behind the project like J.J. Abrams. DC Comics and Looney Tunes properties are two of the major franchises within Warner Media. Why axe them at all?
At least unlike the Batgirl movie which looks to be gone, Batman: Caped Crusader is being shopped around for other streaming services. But if it’s not bought up, who knows if it will ever see the light of day?
It is important to note that Cartoon Network has been fighting hard against this. Their executives are just as upset as the creators. A lot of their shows are being affected the most. Cartoon Network warned Discovery not to do any of this. It would damage relationships with creators. They also advocated for some of their shows to make sure they still air like Summer Camp Island which is great! They are trying to preserve their legacy as much as they can.
But there’s a real chance that Cartoon Network might not even be around by next year. There have been some rumors and deleted tweets within the industry saying that Warner Media will completely absorb the company, thus ending Cartoon Network. Take that with a grain of salt as it is rumored, but it is a very real possibility of this merger. Some 30th birthday, huh?
So why did all of this happen in the first place? Creators demanded answers. It was hard at first to get any explanation. When it comes to mergers, the normal higher-ups they would talk to have been either moved to other departments, fired, or quit. The chain of command for answers was broken. As of writing this, there has been no official statement from Discovery or HBO Max. What we do know is how this affects the creators and what is the most likely cause of all of this pain.
As the dust started to settle, the truth came out. This all happened because David Zaslav wanted to cut down on costs with the company’s $3 billion debt.
By cutting animation, Warner Bros. Discovery doesn’t have to pay creators their residuals, something they were fighting so hard for with #NewDeal4Animation. In many cases, the residuals go to the unions to fund animators’ healthcare. By cutting these costs, Warner Bros Discovery is directly defunding the healthcare within the unions. Some of the shows that have completed unreleased content like Scoob! can be tax write-offs for the company taking a loss.
CNBC estimated this would save Warner Bros Discovery tens of millions of dollars of that $3 billion debt. I also would like to point out that last year, David Zaslav made $246 million. If this fails, he’s going to be fine. This guy can walk away from all this right now and it would not impact him in the slightest.
But what he has done to the animation industry could have horrible ramifications. After Netflix and HBO Max’s treatment, there is a deep distrust from animators towards streaming services.
The horrible icing on the cake is because of the streaming wars, many companies don’t make hard copies of their animated series. DVD and BluRay aren’t always an option. For example, when all this happened, Warner Media stopped producing physical copies of Infinity Train. DVD sales for the series skyrocketed and sold out on Amazon. In turn, eBay prices have risen for these DVDs. These same canceled shows were dominating charts on iTunes because it was the only place that fans could purchase these series. Physical editions only apply to a few shows though. Some series are just gone for good.
It’s become so bad that some creators have called for fans to pirate these shows because it’s now the only way to see this content any more.
Years of work, hundreds of hours, missed time with friends and family, working late evenings, blood, sweat, and tears of these creators are gone. All because some rich dude at Discovery waved his magic pen thinking these people are expendable. Thousands of lives were affected in a single day. One anonymous showrunner told The Wrap:
"“There is clearly no long-term, multiseason career in animation anymore, not just at WBD but anywhere. None of these streamers will commit to picking up more than one season of a show at a time, which is just not how animation works. Animation is a long-term investment — you can’t just pop in and pop out and think you’re gonna get good quality.”"
If you want some quick rundowns of everything I just talked about, I highly suggest these videos from The Roundtable Part I and Part II, Basement Life Podcast, and Saberspark. They source all of their references. But they’re also reactions from the point of view of a fan. I should warn you that there is swearing in all four videos because they, like me, are mad at Zaslav and Discovery. But they’re good looks at the general confusion in this time period.
If David Zaslav’s gambit pays off and he makes money from the pain of people working under him, it sets a dangerous precedence for the entire industry. Not just with animation, but all shows are then at the mercy of these corporate executives to churn and burn their series and contracts. If Zaslav’s treacherous game works, it opens the door for every other streaming service to do the same. It would show that this pain works for the few people at the top to thrive while both consumers and creators are left with scraps and low-quality content going forward. Comedian Adam Conover summed it up best in this video, but warning, there is some swearing in this summary.
This brings us to Disney.
The thing about Disney is, unlike the other services I’ve discussed so far, they got their start in animation. It is their thing. They will always be a home for this kind of content. That said, it doesn’t mean they’re not without their controversies. There is, of course, the big stuff like how Disney-Pixar protected John Lasseter when he was committing sexual assault and misconduct. Heck, just the man Walt Disney himself was a monster in many ways like throwing his workers trying to unionize and industry rivals to the U.S. Government during the Red Scare.
What I want to focus on is the more recent behavior when it comes to animated series under the Big Mouse.