HBO Max and Discovery+ have merged the streaming service to kick off summer 2023
Warner Bros. Discovery will launch its planned streaming service that combines HBO Max and Discovery+ next summer, executives said Thursday during the company’s earnings call.
Why is this important: The stacking is part of a larger shift in how Warner Bros. Discovery sees the streaming space under CEO David Zaslav. The executives believe that streaming should complement its other business lines, like motion pictures and television, not replace them.
- “Our streaming strategy has evolved over the past year and reflects the importance, rather than reliance on, [streaming]”, Zaslav said on Thursday’s call.
Details: WBD will launch the new combo offering – which may or may not have a different name – first in the United States before rolling out to international markets.
- The rollout will initially focus where HBO Max already has a footprint.
- WBD expects the combined offering to have approximately 130 million subscribers worldwide by 2025 and to be profitable by 2024.
- The new service will be built on Discovery+’s technology platform, not HBO Max’s, despite Discovery+ being much smaller.
By the numbers: The company said it currently has more than 92 million subscribers worldwide between HBO, HBO Max and Discovery+ cable subscribers.
- The streaming division suffered a loss of $1.5 billion in the quarter.
- Executives declined to share pricing information for the combined service, but stressed the importance of making the streaming business profitable
- 💭Tim’s thought bubble: That means it won’t be cheap.
Between the lines: WBD is exploring a free, ad-supported streaming service similar to Paramount Global’s PlutoTV.
- This would increase the amount of inventory WBD can use to sell streaming ads. The company told investors Wednesday that it has booked $6 billion in initial advertising commitments this year, $1 billion less than NBCU and $3 billion less than Disney.
The big picture: Investors have been reluctant to reward media companies for subscriber growth at the cost of being profitable. Time is running out for the streaming business to become viable.
- Zaslav defended WBD’s recent move to write “Batgirl” and other premium movies, saying it didn’t make economic sense for expensive movies to go straight to streaming.
- “At the end of the day, bringing all the content together was the only way we saw to make it a viable business,” JB Perrette, CEO of WBD and President, Global Streaming and Interactive, told analysts.