Warner Bros Discovery's DC universe, and its direct-to-streaming strategy, are getting a reset

Warner Bros. Discovery is eyeing a "reset" of its DC cinematic universe and setting up a team with a 10-year plan for the franchise, taking a page from Disney's Marvel Cinematic Universe, CEO David Zaslav said Thursday.

The revelation comes two days after the company announced it would shelve its straight-to-streaming DC film "Batgirl," surprising fans and offering a glimpse into the streaming strategy and new no-nonsense era under recently installed Zaslav.

"We think that we could build a long-term, much stronger, sustainable growth business out of DC," Zaslav said during an earnings call Thursday when asked about the decision to axe "Batgirl." "And as part of that, we're going to focus on quality."

While Zaslav stopped short of commenting on the quality of "Batgirl" explicitly, his statements suggest the film didn't fit the company's new vision for Warner Bros. or the DC franchise. Part of that vision is reestablishing a commitment to theatrical-only releases for Warner Bros. films.

"We've seen, luckily, by having access now to all the data, how direct-to-streaming movies perform," Zaslav said. "And our conclusion is that expensive direct-to-streaming movies ... is no comparison to what happens when you launch a film in the motion picture, in the theaters."

Zaslav took the helm at the newly merged Warner Bros. Discovery in April and has prioritized cost-cutting measures and sought to refocus the company's content strategy, taking a vastly different direction than former WarnerMedia CEO Jason Kilar, who prioritized streaming and digital media.

"This idea of expensive films going direct to streaming, we cannot find an economic case for it," Zaslav said. "We can't find an economic value for it. And so we're making a strategic shift."

While "Batgirl" had a more modest budget than its theatrical counterparts — around $90 million after Covid protocols hiked costs — Warner Bros. Discovery, a newly minted merger between Warner Media and Discovery, has been combing its books for places to save money. Shelving the "Batgirl" film allows the company to take a tax-write off as part of a wider effort to pare down overall company debt.

The film completed production in March and was in the early stages of editing by the directing duo of Adil El Arbi and Bilall Fallah ("Bad Boys for Life," "Ms Marvel"), but it won't be released on the company's streaming service, premier in theaters or be sold to another studio if the company opts for the tax write-down.

Burying the film also saves Warner Bros. Discovery potential marketing costs and any back-end payouts in original film contracts that may have pre-dated the merger.

Big name actors are often compensated after a film's release based on box office markers or viewership metrics. And "Batgirl" had some big names attached: Michael Keaton reprised his role as Batman, J.K. Simmons was cast as Commissioner Jim Gordon and Brendan Fraser was tapped to portray the villain Firefly.

"Although the stated explanation for the scrapping of 'Batgirl' concerns the changing strategies with regards to feature films being released directly to streaming platforms, this still seems to be a remarkable decision given how far along the production was," said Robert Thompson, a professor at Syracuse University and a pop culture expert. "Like burning down your house just before you pay off the mortgage."

The decision seems to pass "at least some judgement" on the quality of the film, Thompson said, since Warner Bros. Discovery sees no future for it in either streaming or theatrical release.

Still, with "Batgirl" in such early stages of post-production, further editing could have addressed issues with the film in time for its scheduled debut in late 2022.

While shelving the movie may make some financial decision, it comes at a social cost. Not only were fans of DC comics disappointed, but many questioned why the company had axed a project helmed by an Afro-Latina star, Leslie Grace.

Warner Bros. Discovery was already under fire for not openly addressing ongoing allegations against "The Flash" star Ezra Miller.

The decision to shelve "Batgirl" also raised questions about the future of other HBO Max film and television projects, with many subscribers taking to social media worried that their favorite programs could be next on the chopping block.