While most press attention around Warner Bros Discovery has focused on their harsh pruning of their scheduled content releases, we’ve finally also had some clarity on the fate of the new entity’s two premium streamers- Discovery+ and HBO Max. Branding Blake, entertainment lawyer at Blake & Wang P.A, updates us on the new announcement.
Subscription Targets Released
We’ve long been speculating that the two platforms will merge, and that has now been confirmed. As of summer 2023, we will see the newly merged and rebranded entity launch domestically, expanding to Latin America by the year end. Other markets will follow shortly after. They are currently targeting 130M subscriptions by 2025, even with the reduction in content spend announced this week. It will target hitting profitability by 2024.
Quite a rich benchmark, with a $1.5B loss announced for Q2 in its streaming division. Apparently both content libraries will be retained. The Discovery+ tech stack will be used, based on consumer feedback about the current interface for both platforms.
AVOD Tier to be Added
Once the merger is settled, we’ve also been promised a free, ad-supported streaming service with parts of the premium content, an approach all streamers now seem to be counting as a new default. This may cause a re-evaluation of existing licensing deals, but it’s too early to speculate. Currently, properties owned by the entity are being distributed to both platforms. We also know that they have reiterated that the Warner Brothers film content will be theatrical-release only, with CEO David Zaslav reiterating that they ‘cannot find’ an economic model for direct-to-consumer feature films.
It’s a tough time to be positioning- or rather repositioning- a streaming service in what’s proven to be a somewhat stagnant and bloated market, but Warner Bros Discovery have the established streaming platforms and a massive content library to leverage to help them. Further developments will be interesting to see.
