David Zaslav, head of Warner Bros. Discovery, announced that HBO Max and Discovery+ will merge into a single streaming service. second quarter earnings Call on Thursday.
Media Corporation did not disclose a name for the combined platform, which it said would launch in the US in the summer of 2023, with other regions to follow in 2024.
The move reshuffles the streaming marketplace, where HBO Max is widely seen as a budding success story. HBO and HBO Max grew to a joint — and respectable — 76.8 million global customers at the end of the first quarter of the financial year.
The announcement also means that employees of HBO Max and other WarnerMedia-owned brands will lose their jobs as the company cuts back on content spending and eliminates unnecessary roles.
According to the quarterly earnings report, the current editions of HBO Max and Discovery+ combined have 92 million subscribers.
The company is considering a free, ad-supported version of the United streaming platform, Zaslav confirmed on the earnings call. The ad-supported tier of HBO Max currently costs $10 per month.
Zaslav is trying to cut costs and find $3 billion savings — A promise made to investors after WarnerMedia and Discovery Inc. formally merged in April, creating one of the largest media companies in the US.
The change in streaming strategy was announced two days after the news broke that WarnerMedia decided Shelves “Batgirl” and “Scoob!: Holiday Hunt,” Movies that were made specifically for HBO Max and were greenlighted by the previous corporate regime.
“Batgirl” and “Scoob!” The sequel won’t be distributed on any streaming platform or released in theaters – apparently the company could take a tax write-down on both projects and try to recoup production costs, according to variety.
“The decision not to release Batgirl reflects a strategic shift in our leadership as it relates to the DC universe and HBO Max,” a Warner Bros. Pictures spokesperson said in a statement. “Batgirl” star Leslie Grace “is an incredibly talented actor and that decision is not a reflection of her performance.”
The move stunned Hollywood, where major studios rarely bury movies entirely.
In most cases, movies that don’t meet the creative or financial expectations of studios are sold on streaming platforms or quietly dropped in theaters without a marketing campaign.
In recent days, six films produced exclusively for HBO Max have disappeared from the stage, including Seth Rogen Comedy “An American Pickle” and the Covid-era relationship drama “Lock Down” starring Anne Hathaway and Chiwetel Ejiofor.
The restructuring at WarnerMedia Discovery comes at an uncertain time in Hollywood. Netflix’s financial crisis has raised questions about the viability of the streaming business, and many executives are concerned about an impending economic slowdown.
Zaslav’s vision for WarnerMedia represents a dramatic departure from Jason Kilar, the former CEO of WarnerMedia. ,Clearly gone WarnerMedia When the multimedia company was owned by telecommunications giant AT&T.)
Killer invested heavily in streaming during his tenure, including setting up simultaneous streaming and theatrical releases for Warner Bros. films in 2021 and overseeing the launch of CNN+ – a platform that was swiftly axed by Zaslav’s team,
Admittedly, Zaslav is more skeptical of the idea that streaming is the end of Hollywood’s future. He’s keen on big-budget spectacles that can draw audiences to brick-and-mortar theaters — like Paramount’s “Top Gun: Maverick” did this year.
Referring to the box-office success of “The Batman” and “Elvis”, Zaslav said on Thursday’s earnings call, “We will fully embrace the theatrical as we believe it will generate interest and demand. does.”
Zaslav is also said to support reality programs and “unscripted” shows that are popular draws on Discovery-owned cable television channels such as Food Network and HGTV. In contrast, HBO specializes in expensive small screen productions like “Westworld.”
HBO Max is home to original streaming shows such as the Kelly Cuoco mystery “The Flight Attendant,” the pirate skit “Our Flag Means Death” and the Emmy-winning Show business satire “hacks” Starring Gene Smart as a veteran comedian.
The platform hosts a vast library of movies and television shows spanning decades, from old HBO dramas and the hit NBC sitcom “Friends” to classic films provided by WarnerMedia-owned cable brand Turner Classic Movies.