Warner Brothers and HBO Max are staring down serious problems and opportunities as the company moves forward with its merger with Discovery.
Key Details
- Thursday’s earnings call for Warner Brothers Discovery offered some good news and bad news for the corporation as it struggles to keep its streaming service in good standing.
- The combined subscribership of HBO, HBO Max, and Discovery+ nearly hit 95 million in quarter three, adding 2.8 million subscribers
- The company is also moving its planned merger of HBO Max and Discovery+ ahead several months to Spring 2023—merging into a single streaming service. No reason was mentioned why beyond the fact that the merger is going well.
- Quarter three was still a loss for Warner Brothers’ parent company, with CEO David Zaslav reporting a nearly $2.8 billion net loss this past quarter.
- HBO Max may also hike its monthly subscription prices in the near future as well. The lower ad-supported tier will also increase its volume of ads.
Why it’s Important
HBO Max has already faced two years of stress following the ultimately failed purchase of Time Warner by AT&T. The successful launch of the merged app will make or break Zaslav’s tenure at Warner Brothers Discovery and set the future direction of the entire company.
“Zaslav himself has received enormous criticism from creatives and audience members alike for WB’s restructuring, which has resulted in layoffs, high-profile departures, and conflicting visions for the future from its biggest franchises,” says IGN.
Backing up a Bit
During the pandemic, the company attempted to use the entire slate of Warner Brother’s theatrical releases including Godzilla vs. Kong, Dune, and dozens of other theatrical films as a loss leader for original streaming content—a move that alienated prominent filmmakers like director Christopher Nolan who took his next upcoming film to Universal Pictures.
Warner Brothers then proceeded to merge with Discovery Inc. in March 2022 and hired David Zaslav to lead the company. He proceeded to wipe the slate of HBO Max’s content, canceling several prominent projects, and turning the combined streaming services—with very different audiences and subscriber interests—into a single more expensive service.
“From their user interface to their backend to their content, the two services are extraordinarily different, with HBO Max likely leading Discovery Plus in subscriptions as it had approximately 76.8 million users in April before the acquisition, and the combined services now have 94.9 million subscribers,” says The Verge.
As we previously reported, HBO Max celebrated one of the largest premieres in its history in August with the launch of House of the Dragon.
