The HBO Max and Discovery Plus merger aims to reduce subscriber losses with a broad offering that has “something for everyone in the household,” according to Jean-Briac Perrette, Warner Bros. global streaming chief. Discovery. The company also came up with the idea of a free streaming service that would be supported by ads.
The company plans to launch the merged streaming service in the United States next summer and in Latin America later that year. Europe and Asia-Pacific will follow in 2024.
The goal of Warner Bros. Discovery for 2025 of 130 million paid subscribers would be an increase of more than 40 percent from the combined 92 million subscribers it has on HBO Max and Discovery Plus. Netflix said last month that it has 220 million paying subscribers worldwide. Disney Plus said in May that it has about 138 million subscribers worldwide.
Warner Bros. Discovery aims to make the new streaming service profitable in the United States by 2024 and to generate $1 billion in revenue for the global streaming segment by 2025, Perrette said. No name or pricing system for the new service was announced.
For the entertainment industry, a move of HBO Max causes peaks
Warner Bros. Discovery was founded in April, when AT&T’s WarnerMedia unit and Discovery completed their merger, starting with approximately $55 billion in debt. As Zaslav’s team appears to compete with Netflix and Disney and become profitable, it has also scrapped some legacy projects — such as when it pulled the plug on CNN Plus in April, less than a month after the service launched.
During the call for profit on Thursday, Zaslav also confirmed that Warner Bros. Discovery would make “a strategic shift” from releasing movies directly to streaming, saying the approach made less financial sense in the long run than releasing movies in theaters. “This idea of expensive movies going straight to streaming, we can’t find an economic case for it,” he said.
Those comments came after an investor asked why the company canceled the release of “Batgirl.” The $90 million film — starring Leslie Grace in the title role and starring Michael Keaton as Batman more than 30 years after he first donned the hood — was canned along with “Wonder Twins” and “Scoob!: Holiday Haunt” because of Warner. Brittle. Discovery’s new strategy.
The cancellations could also trigger a potential tax write-off, according to a Variety report, and come amid complaints from HBO Max users that certain shows have been abruptly removed from the service.
“Our focus will be on theatrical,” Zaslav said. “And when we bring the movies to HBO Max, we find that they have significantly more value.”