Warner Bros. Discovery will launch its planned streaming service that combines HBO Max and Discovery+ next summer, executives said Thursday during the company’s earnings call.
why it matters: The rollup is part of a broader shift in how Warner Bros. views the streaming space under Discovery CEO David Zaslav. Executives believe that streaming should complement its other business lines, such as theatrical films and television, not replace them.
- “Our streaming strategy has evolved over the past year, and reflects the importance of, rather than relying on, [streaming]Zaslav said during the call on Thursday.
description: WBD will launch the new combined offering – which may or may not have a different name – in the US before rolling out to international markets.
- The rollout will initially focus where HBO Max already has a footprint.
- WBD expects the combined offering to have approximately 130 million customers globally by 2025 and be profitable by 2024.
- The new service will be built on Discovery+’s technology platform, not HBO Max, despite the fact that Discovery+ is much smaller.
By numbers: The company said it currently has more than 92 million global subscribers among its HBO cable customers, HBO Max and Discovery+.
- The streaming division lost $1.5 billion during the quarter.
- Executives declined to share any pricing information for the combined service, but expressed the importance of making the streaming business profitable.
- Tim’s thought bubble: That means it won’t be cheap.
Between the lines: WBD is exploring a free, ad-supported streaming service similar to Paramount Global’s PlutoTV.
- Doing so will expand the amount of inventory WBD uses to sell streaming ads. The company told investors Wednesday that it booked $6 billion in advance advertising commitments this year, $1 billion less than NBCU and $3 billion less than Disney.
big picture: Investors are shying away from rewarding media companies for customer growth at the cost of being profitable. The clock is ticking for the streaming business to become viable.
- Zaslav defended WBD’s recent decision to write “Batgirl” and other premium films, saying it doesn’t make economic sense for direct streaming of expensive movies.
- “At the end of the day, putting all the content together was the only way we made this a viable business,” JB Perrett, WBD CEO and President, Global Streaming and Interactive, told analysts.