Jon Steinlauf on Pulling Off Warner Bros Discovery's Upfront

Adweek's upfront week postmortems with ad sales chiefs presenters continue. We've already spoken with NBCU’s Linda Yaccarino, Fox’s Marianne Gambelli, TelevisaUnivision’s Donna Speciale and Disney's Rita Ferro. Now, it's time for Jon Steinlauf, chief U.S. advertising sales officer, Warner Bros. Discovery. WarnerMedia and Discovery completed their $43 billion merger last month, giving Steinlauf mere weeks to pull together an upfront event for the newly combined company. The result was a celebrity-filled presentation on May 18, led by Jennifer Hudson at New York’s Hulu Theater at Madison Square Garden. In a conversation with Adweek, Steinlauf explained how the Warner Bros. Discovery presentation came together so quickly, why joining the in-person upfront week was a dream for him and what marketers should expect from their first upfront negotiations with the combined company. This interview has been edited for length and clarity. Adweek: You've said there was little communication between Warner Bros. and Discovery ahead of the merger closing in April. So what was it like putting together an upfront presentation so quickly?Steinlauf: Well, we were fortunate that Warner had been in that venue for 10 years. Warner crashed the broadcast upfront week about 10 years ago—and they settled in at the theater at Madison Square Garden. A lot of the people that had been on the Warner team, production and logistical people, knew the venue. They knew the challenges, so they were fairly far down the road come [when] we walked into the office on April 11 as a brand new company. The deal closed after the market closed on April 8 [and there was] very little communication between the teams until April 11. So how'd it all come together?Work was being done independently. Creative work. Most notably, Warner had secured Jennifer Hudson as the quasi-host of the whole festivity because she's doing a syndication show—in some ways the replacement to the Ellen Show in the WB talk show lineup. So we had that in place. And then we just sat down as two teams. They had been in broadcast upfront week; we never had. [As Discovery,] we were supposed to go in 2020 for the first time ever. That got canceled [because of the pandemic]. Then we took our [upfront week] spot virtually, so everybody assumed their positions last year. We tried to simulate an upfront week with everybody being virtual. So we took our designated spot on Tuesday morning. We did a virtual presentation last year. This year, all things looked pretty clear to go back on stage. We had two spots. We had May 17, Tuesday morning, where Discovery had booked space in Jazz at Lincoln Center. Warner had booked space in MSG Theater for May 18 morning. So we held those two dates, not knowing when the deal would close. You never know when these mergers are going to close. So we had to be prepared to go our separate ways. Warner Bros Discovery Wants to Be as Big as the Broadcasters in First Upfront Wow, so that's wild. You each had a full presentation ready to go? If so, how'd you combine them?I'd say both companies were about halfway there in finalizing everything, but the linchpin was Jennifer Hudson. And then I wasn't announced. Because of regulatory restrictions, we couldn't talk to anybody over there about what they wanted to do, for good reason. So April 8, I'm named the head of ad sales. It becomes my responsibility on April 8 to run the upfront presentation and to set the agenda. We sat down as one company on April 11. So what do we want to accomplish? Well, the first thing is we picked May 18. We picked Madison Square Garden because we wanted the capacity of the Garden. It's about three times the seats of Jazz at Lincoln Center. So we felt there'd be a lot of curiosity. First-year, coming out party—the great reveal—everybody's talking about us. So we took the bigger space. That was decision no. 1, and decision no. 2 was, "What does the ad sales leader want to do with this," without even knowing a lot about their company because I couldn't even see anything, so operating somewhat blindly. When I got to know their company a little bit better, I realized how important sports were and how important HBO Max was—and we had this leadership change at CNN. So we went down that road of, "Let's play up sports." And I came up with the line, "sports is the new primetime." I wanted to ask about "sports is the new primetime." Can you expand on that more?Primetime on the broadcast networks is down to about a 0.5-rated business. Some of the higher-rated shows, some of the above-0.5 shows, are being converted exclusively to streaming service content. So there's been a shift away from the development of top-tier, scripted dramas and top-tier sitcoms, so it is a very different product than it was. Broadcast primetime, most people would have struggled to name a couple of shows. It's a mere shadow of what it once was in its heyday, even if you go back to the '90s. So we saw this, and we started looking at the ratings for sporting events in primetime, compared to ratings for entertainment or news magazines or game shows or court shows, or repeats of any of the above. We felt that the real strength of the new company that we're creating, in terms of primetime, is NBA, March Madness, MLB postseason and now the NHL postseason. That's what people are watching more than anything. Sports programming in primetime has held up to the wear and tear of fragmentation. We're packaging sports with HGTV prime, Food Network prime, Discovery Channel prime, TLC prime, CNN prime, TBS entertainment and TNT entertainment. So we're coming to market with a package that is newly defining what primetime is. That was one of my core objectives. We're calling it a disruptive primetime strategy. Stop trying to force-feed round peg, square hole by saying I want to be an 18-49 advertiser on national set-top box television. It's not practical anymore.Jon Steinlauf So what were your priorities and objectives for the event?We wanted to talk about the great brands of Warner Bros. Discovery, the amazing portfolio of brands that we have now through the Discovery acquisition of Scripps and the Warner Brothers merger into Discovery. We're left with probably a dozen of the best brands in TV well under one roof. So we want to talk about that. And then we had the HBO, Discovery+ and sister streaming service combination. They're both new to ad sales. So we wanted to talk about the benefits of having those two services together as a company, which helps us with our advanced advertising, which helps us with our data-driven linear, which helps us with all the tech advancements that are going on. And then CNN, as I said earlier, a new leader at CNN, Chris Licht. The timing was good. He officially started the job on May 2, so he had a week or two to prepare for his remarks. And then the question is, how do you sell sports? I'm making a big deal out of sports, calling it the new primetime. I asked the people at Turner Sports, what talent could you send us? What video can you do? And we're in the middle of the NBA in the NHL, so it wasn't so easy to get people there. Shaq was there. Then he flew across the country, soon as the event ended, to do the Golden State and Dallas game for us last night. We had Shaq, Wayne Gretzky and Pedro Martinez on stage together, three of the greatest that did what they did, basketball, pitching and hockey, on stage together. That was a moment. We had Grant Hill, who represented March Madness because he's one of the lead on-air talents for March Madness for the CBS and Turner joint venture. He played in some big Final Four games in his life—and then he announced maybe the most famous Final Four games in recent history. And then we had an Ernie Johnson video, which talked about the whole significance, the prominence of Turner Sports. Turner Sports, I don't think, has ever really been elevated. I can't speak for the last 10 upfronts, but Turner Sports is stronger than ever—and we wanted to elevate it at the presentation. Personally, what was it like being part of the first Warner Bros. Discovery presentation?I was thinking about that this morning, as some of this is still somewhat surreal to go through a day like that. I have been competing against this [upfront] week. I've been selling cable network advertising since 1985. I started at ESPN as a salesperson in 1985. And I've always been envious of this week. And I've always said to myself, all the press, the glitz and glamour and the paparazzi, TV coverage and consumer press coverage of this week—and we've never been a part of it. We were always relegated to, "You get to go in April." Only the big-time companies can go to broadcast upfront week when all the clients come in from out of town. So what you saw yesterday was about 3,000 people at MSG, but there were also 5,000 people watching virtually yesterday. So we covered a lot of ground. Some people prefer virtual, but a lot of people hadn't been here since 2019. But having been envious of this week, to be a part of it, even at this stage of my career, 40 years into knowing about the upfront, to have played a role yesterday the way I played it. It was pretty significant after following it as an outside observer for all these years—and then to be right in the middle of the thick of it for the first time ever. You get a boost from that. It was exciting. And we made a lot of news. And it was a special day. Buyers Have Many Questions As Warner Bros. Discovery Opens For Business Also, I never knew I wanted to see Lil Jon next to a bigger Jon, Jonathan Scott. What was it like wrangling all the talent and having Jennifer Hudson as the linchpin holding it together?What you saw were legacy companies, the legacy HBO company, which was the original [premium] cable network. It started in the early '70s. You saw them make their real debut on the upfront stage as an ad sales platform. We gave HBO Max the final 12 minutes, ending with Lizzo—and then we brought Jennifer Hudson back out. But there was a lot of talent. That quick piece with Mindy Kaling, a quick piece with Andy Garcia and Gloria Estefan and a quick piece from Shaun White. So we did a lot of quick pieces, but we wanted—this was HBO Max's first time, and it's happening when HBO is probably the hottest programmer in the country. So we wanted to tell the HBO Max story at length, which meant something else had to give, but you had the HBO company on stage for the first time and in the ad upfront, you had the Turner company, which was now being elevated in sports and the new leader at CNN. So you had those two companies. Think of it as two different entities. Then you had the old Scripps company and Discovery company. So how do you represent all that talent? Well, from Discovery, we brought Mike Rowe, who's probably the most historically significant. If you look at the talent who have had significant histories with the channels that they were representing yesterday, Mike Rowe from Discovery goes way back. Chip and Joanna [Gaines] from HGTV go way back. Jonathan Scott, who you mentioned. Jonathan and Drew Scott are two of the most important talents ever at HGTV. Chip and Joanna now have their own network. Bobby Flay is one of the original guys on Food Network, so we had him there. And then Shaun Robinson, the host of the 90 Day Fiancé tell-alls. So she's the Andy Cohen of 90 Day Fiancé, the biggest entertainment franchise maybe in all of TV right now. It's just a crushing number every Sunday night and every Monday night. So we say let's have representation of the histories and the hot shows of these companies. And then you mentioned Jennifer Hudson. Then bring in the athletes and bring a few other people that have unique stories to tell. At the upfront, we had Anderson Cooper, who has a unique story to tell. He was in that first sequence with Jennifer Hudson. That was the talent strategy. Try to represent the history of these companies as well as the future. We felt that the real strength of the new company that we're creating, in terms of primetime, is NBA, March Madness, MLB postseason and now the NHL postseasonJon Steinlauf You've talked about the Warner Bros. Premiere offering—and on stage, you mentioned offering incentives for transacting on total audience versus legacy demos. Can you explain that more?We're a big believer that the currency should be broader. Buying television time on 18-49 or 25-54 is well past its usefulness. Because that's not the audience. That's not really where the wealth is. That's not who has cable. That's not who's watching live TV with live ads on a night-to-night basis. If you look at this country, where the heads of households are in their mid-30s or younger, there's not a high likelihood that they have cable. They may have logins from family. Cable television subscriptions are very strong post-35 but not great under 35. So we're advocating to buy the audience that's there. Buy TV advertising, cable networks and ad-supported ads. Buy it for what it is good at. Stop trying to force-feed round peg, square hole by saying I want to be an 18-49 advertiser on national set-top box television. It's not practical anymore. So we're trying to spoon-feed them out of there by saying, spread that demo out, even if it's 18-64, even if it's 35-64. Whatever you can do to save the supply of this business. There's an existential threat that these 18-49s start falling off a cliff. There's no supply left. What do we have as an industry now? So call it what it is. Buy it for what it's good at, not for what it's not good at, and we'll [incentivize] you. What I said [onstage] is, "By moving to a broader demo, we'll provide pricing incentives." That means, whatever the rate of change is in this upfront marketplace—it hasn't yet been determined; it will be in the next couple of months—but whatever the rate of change is, we'll negotiate that—and then, if you opt into a broader demo, we'll take points off of that. That's where the discount will come in. How are you combining both the Warner Bros. and Discovery ad sales teams for upfront negotiations? What can marketers expect?The biggest thing is that we now can look at the entire portfolio of activity. We have teams now assigned to each of the major holding companies internally. And they're analyzing the results of 2021-22 activities. What commitments were made to both portfolios when we were independent of each other. Now we're blending all that together—and we're trying to balance their investments, almost like financial planners. We're picking up these two portfolios. We're saying you probably should have more of this. Maybe it's too much of this. Maybe you need to add some sponsorships here. We could create some synergies by moving some of these sponsorships together. Maybe there's something with Shark Week and NHL because they happen at the same time. The Stanley Cup Finals and Shark Week are both going to be around June and July, so maybe there's something we can do together. CNN Sunday night is very lifestyle-focused now under Chris Licht. So all those shows—he talked about Eva Longoria in Mexico or Stanley Tucci in Italy. As CNN develops more of a brand-safe Sunday night lifestyle documentary strategy, how does that fit with things happening at Discovery Channel or things happening at HBO Max—or things happening at Food Network or HGTV, which are two of the great lifestyle channels. So we're just looking for those content synergies that we can find for advertisers by looking at their portfolio and then negotiating. That would be one thing. Another thing would be the idea of Warner Bros. Discovery Premiere that I mentioned earlier. Premiere is something that advertisers can embrace and say this is much-needed supply at the top end of the business. It's more of a modern mix of primetime because it blends together different genres. But I think that's necessary right now. We shouldn't look at primetime as just being the entertainment on those four [broadcast networks]. It's just too limited. We need to expand it. Warner Bros. Discovery Not Worried About Netflix's Problems, Reaches Over 100 Million Global Subscribers How do you feel HBO Max and Discovery will be packaged together and work together going forward? What's the overall streaming strategy?I think they're excellent content services. It's very high-end, top-tier content coming out of both of those engines. Those factories—the HBO factory, the Discovery factory, the Turner factory, the CNN factory—are deep, deep libraries that have been around for a long time. So start with putting 70,000 episodes of high-quality video, full-episode television on Discovery+—and you're only dropping in four minutes of ads. And you have great technology. We have great reviews for our tech. So, people who are going in, we have our $4.99 service with ads and our $6.99 without. People are going in; they love it. They're watching two or three hours of it a day. It becomes their go-to. It's the way a lot of people prefer consuming their Discovery lifestyle content through that platform. And then on HBO, everything that HBO has really ever produced is available with limited advertising at $9.99. So we're going to try to scale those two products, the HBO AVOD and the Discovery ad-lite—and try to scale those two products and look at them as separate, but together since different advertisers will gravitate towards one or the other or some may want both. And get them bigger. That's where the younger viewers are. So what I was saying before about the broader demos on the set-top box in the cable bundle, they can be supplemented with some of the people who are 30s, say 35 or younger, maybe a little older. Those people tend to watch more on the apps and smart TVs or connected devices. So you want to offer that broad spectrum of viewership.

TV Upfronts

Jon Steinlauf on How Warner Bros. Discovery Pulled Off Its First Upfront Presentation

The ad sales chief explains the company's Premiere offering and why sports is the new primetime

Bill Bradley

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Bill Bradley