Media conglomerate Warner Bros. Discovery, Inc. has announced that the two video streaming services will eventually be merged into one service. This confirms what has long been rumored since the parent companies for the two services merged earlier this year.
Warner Bros. Discovery executive JB Perrette explained the decision during the company’s earnings call on August 4, 2022.
“We recognize that both our existing products had shortcomings,” he said. “HBO Max has a competitive feature set but has had performance and other customer issues. Discovery+ has best-in-class performance and consumer ratings but more limited features.”
So what does this mean for you as a streaming TV consumer?
Some of the details are still a little murky, but let’s walk through the details of what we know so far.
HBO Max and Discovery+ Will Merge in 2023
The biggest takeaway from the Warner Bros. Discovery earnings call is that HBO Max and discovery+ are likely entering their final months as stand-alone products.
We don’t have an exact date that the two will become one, but we do have a better understanding of the timeline coming out of that earnings call.
The yet-to-be-named combination service will launch in the United States during the summer of 2023. The global plan is to incrementally roll it out by the end of 2024.
Why Is Warner Bros. Discovery Doing This?
In the extremely competitive world of video streaming content, executives are increasingly concerned with what the industry refers to as “churn rate.” In basic terms, this is the measure of customers who sign up for a subscription and then subsequently leave the service behind either to save money or to spend those dollars instead on “the next big thing” in the space.
With so many options available now, many consumers are using the strategy of rotating streaming subscriptions monthly as a way to lower bills and avoid paying for more streaming content than they could possibly consume in a month.
And with admitted flaws in both of its services, Warner Bros. Discovery is betting that marrying all of its streaming content into one package will entice subscribers to hang around for the long haul.
After all, if one person in the household enjoys HBO originals and another is hooked on home improvement shows from discovery+, it stands to reason that they’d be more likely to agree on paying for this one service as a way to satisfy both consumers.
What Can We Expect the New Service To Look Like?
Company executives have already pointed out that they like the feature set of HBO Max but prefer the performance of the discovery+ platform, so we can expect that they’ll be pulling from the “best” of both of these services and discarding the bad as they create the product.
From a content library standpoint, Warner Bros. Discovery is prepared to present a very robust offering after the merger of the two major media companies.
HBO Max not only brings the entire HBO library to the table but also owns exclusive streaming rights to popular shows including “Friends” and “The Big Bang Theory.”
Discovery+, meanwhile, already features more than 60,000 episodes of series from HGTV, History Channel, A&E, TLC, Food Network and more.
But the focus on the new venture may be exclusivity. Both entities are creating original content, and with the backing of the Warner Bros. production studios, it’s a sure bet that will continue.
“Owning the content that really resonates with people is much more important than just having lots of content,” Warner Bros. Discovery executive David Zaslav said during the call. “In other words, at a time when almost every piece of content ever made is available to consumers across any number of free and paid services, curation, quality and brand have never been more important.”
With CNN as a Warner Bros. Discovery property, the new streaming platform could add an emphasis on livestreaming news, although one of the first actions the company took post-merger was to shutter the brand new CNN+ stand-alone service.
What remains to be seen is how much Warner Bros. Discovery will dabble in the expensive world of live sports content, in which competitors Apple TV+, Paramount+ and Peacock have invested heavily in recent years.
How Much Will It Cost?
Warner Bros. Discovery has not yet put a price on the merged streaming service.
The executives did offer some potential clues for the strategy during the call, and we have some current pricing models that may give us a hint at the direction they’ll take.
So let’s speculate.
The presentation during the earnings call mentioned three potential pricing tiers: ad-free, ad-lite and ad-only.
HBO Max and discovery+ each have ad-free and ad-lite subscription options available now:
|Subscription Service||Monthly Cost|
|HBO Max ad-free||$14.99|
|HBO Max ad-lite||$9.99|
The “ad-only” strategy is already being implemented by competitor Peacock, which offers a limited amount of content for free on its “beginner” tier. For example, Peacock gives users a free taste of hit shows, including “Yellowstone” and “The Office” but saves the full series for paid subscribers. This is a strategy that is meant to compete with free streaming TV services and also lure potential customers into paying for a higher tier of the service.
Given that information and the pricing model of chief competitor Netflix, it’s probably a safe assumption that the ad-free and ad-supported versions of the new streaming service could land somewhere in the $10 to $20 per month range.
As it stands, the cheapest you can get both HBO Max and discovery+ on monthly plans is $15 per month total, and for that, you’re getting the ad-supported subscriptions.
Perhaps $14.99 for ad-supported and $19.99 for ad-free would be a starting point for the new service.
Things To Note About The Months Ahead
For now, there is no change to what you’re paying for either streaming service.
But there are some notable changes you should anticipate:
- Cross-platform content sharing is coming. You’ll start to notice that discovery+ is featuring content that usually is on HBO Max and vice versa. One of the more prominent crossover examples you can anticipate is Magnolia Network content arriving on HBO Max by this fall. The popular content from HGTV stars Chip and Joanna Gaines typically resides on discovery+.
- CNN streaming content returns. After the highly publicized launch and subsequent shuttering of the CNN+ streaming service earlier in the year, Warner Bros. Discovery finds itself with loads of on-demand CNN content in need of a home. You can expect to start seeing this on discovery+ in the coming months.
- Warner Bros. new release movies are going back to the big screen. During the height of the COVID-19 pandemic, HBO Max made headlines by releasing some big-budget films on the streaming service on the same day as their debuts in theaters. This strategy is going away, along with the concept of “straight to streaming” movies, which executives said was not profitable in the current movie-watching climate.
- Batgirl is canceled. As a fallout of the strategy outlined above, one of the more surprising content announcements to come out of that earnings call was that the DC Comics superhero movie had been canceled ahead of its scheduled “straight to HBO Max” release.