Warner Bros. Discovery probably should have paid attention to its own viral slide show, the one that showed a general lack of crossover between HBO Max and Discovery+ subscribers.
The David Zaslav-led company has planned to combine the pricey Max and inexpensive Discovery+ into a new, singular platform this spring. That will still happen, though Discovery+ also will continue as a standalone service, a person with knowledge of the plans confirmed to IndieWire. Additionally, not all Discovery programming will go to the Max/Discovery+ hybrid service; some will remain exclusive to Discovery+.
Discovery’s Shark Week stunt programming and Chip and Joanna Gaines’s Magnolia Network shows will available on both Discovery+ and the coming hybrid service. The Wall Street Journal first reported the news.
It’s a last-minute shift, but one that makes sense when you consider the price and (self-reported) fanbase disparity between the brands. Why would someone used to paying $4.99/month (with ads) or $6.99 (without) for their Discovery+ programming suddenly be cool with paying HBO’s $9.99/month (with ads) or $15.99 (without) — or realistically, a few bucks more than that when the two platforms combine — to add HBO programming they never wanted? Or at least, they didn’t want at HBO prices.
Discovery+ has about 20 million subscribers and is already profitable. Equity analysts at Wells Fargo estimate the overlap between Max and Discovery+ is about 4 million subs in the U.S.
Warner Bros. Discovery also plans to launch its own FAST (free, ad-supported streaming television) in the future. The company has already licensed a bunch of its programming, including “Westworld,” to launch branded FAST channels at Tubi and The Roku Channel.
To get here, and to achieve lofty cost-cutting goals, the company has been canceling, un-renewing, and straight-up scrubbing HBO and HBO Max programming and library content left and right. While the list is too long to, well, list, the biggest example is “Batgirl,” an $80 million completed movie that will never see the light of day. Warner Bros. Discovery instead used the HBO Max film as a tax write-off.
Zaslav and his trusty CFO Gunnar Wiedenfels will report WBD’s fourth-quarter and full-year 2022 earnings on February 23.
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