HBO Max Is Not Ruined
Why I think everybody's overreacting. Probably.
Warner Brothers Discovery announced its first earnings since the merger of the two companies. Of particular interest was the number of subscribers to HBO Max. Warner reported one combined number for Discovery+, HBO Max and HBO on its own. Those three had 92.1 million subscribers up 1.7 million on the quarter The growth came entirely from international subscribers as domestic subscribers fell by 300,000 to 53 million. However, the company forecast growth, saying it expects to have more than 130 million global subscribers by 2025.
One of the reasons the company combined the numbers, is that it has long planned to combine the services into one platform. In its earnings statement, Warner Brothers Discovery confirmed that plan, saying it will roll out the combined version of the service in the US and Latin America in 2023 and Europe and Asia Pacific in 2024. They pitched it as each platform bringing a strength. CEO and president of global streaming and games JB Perrette noted that HBO Max has “performance and customer issues,” but rich features, while Discovery+ has more limited features but a more robust tech stack. HBO Max also has strong scripted content and a male skewing audience while Discovery+ has strong unscripted content and a female skewing audience. So the pitch is that combining them gives you all the content, all the audience and rich features with a solid tech platform.
After shelving Batgirl, Scoob 2, and removing several originals from HBO Max earlier this week, folks have wondered if the Discovery executives that run Warner Brothers Discovery really value HBO. Addressing those concerns, former Discovery CEO and now Warner Brothers Discovery CEO, David Zaslav said “we’re going to spend dramatically more” on HBO content in the next few years and said they had "locked up" the majority of HBO's executive team. Presumably meaning with employment contracts. He did not provide any numbers to go with those comments, but did add “Quality is what matters."
Warner also said that once it has rolled out the new combined platform of HBO Max and Discovery+, it may launch a FAST service. FAST stands for Free Ad-supported Streaming TV. HBO Max offers an ad-supported version of its service, but it is not free. This potential new free service would not have all the same programming as HBO Max or Discovery+.
One other development of note. CNN Originals- aka what's left after they canceled CNN+ -- will get its own hub in Discovery+. And probably a hub on the combined service later down the road as well.
This all has people angry.
From simple hate
To desperation
To catastrophising
Good news! They’re not ditching all scripted content. But then I don’t expect that’s what his person meant literally. This person is upset at the stuff they did dump, like Batgirl, and shows they canceled, like Raised by Wolves. Wait! Raised by Wolves was canceled before this current controversy. Maybe they’re upset that Gordita Chronicles won’t get made? Not sure. There is a vague sense they won’t make Max originals anymore, only HBO originals. But that would really just be a branding change.
ANYWAY Let’s hear from Wonder Woman.
Sure, Lynda, but what about this poor person?
Obviously they’re kidding. They named their son HBO.
Look, I am sounding a little flippant here, because I think this particular tempest is very firmly ensconced inside a teapot. HBO did mercilessly kill Batgirl. That is coloring our emotions. And yes what they may do could be terrifying. Like renewing Raised By Wolves. But going by what they’ve actually said, as well as what actually makes sense from a business standpoint and figuring in what the stock market will put pressure on them to do, here’s what I think will happen.
They will migrate HBO Max to Discovery+’s tech stack. It will not go as well as they hoped but it will still be better than HBO Max. They will merge Discovery’s unscripted content into the HBO Max library. You will get verticals of Movies, HBO Originals, News (CNN), Sports (Turner, TBS) Comedies (Turner TBS) and then some set of verticals around HGTV, Food, History and Discovery Science. Maybe “Home” and “Discovery” or some such thing. They have said they’re easing up on kids so I wouldn’t expect a kids vertical but they do have Seasme Street so— who knows. Maybe a Kids vertical too.
That will all be in the UI of HBO Max, with some tweaks. For better or worse. And then there’s the name. This seems to be what has people hung up the most. Warner didn’t say they’d change the name but they did leave the door open. And the Discovery folks are running the show now, so a name that includes the word “Discovery” in it seems like a good bet.
So what if they did this?
That would change very little for most existing subscribers. Current $4.99 a month D+ subscribers would get some additionalnon-HBO content. So they get more content. There are Discovery + subscribers at the ad-free $7 a month level. They would lose their tier and eithe have to go ad-supported or pay more. But they are the smallest in number. The existing HBO Max subscribers would have no change, other than extra content from Discovery in their library. The word “Max” would actually get a new meaning and the “plus” would become a verb. And nobody would loses their naming.
Branding-wise it’s awful. But it’s the kind of awful you see companies do sometimes. But consumer-wise it’s a pretty fair way to re-price and remarket a merged platform. Which means I’m probably way off.
Instead, we’ll probably get Warner Brothers+ at new price points and that’ll be the end of it.