Amid the firm's Q2 earnings call held Thursday, Aug. 4, Warner Bros. Discovery has finally announced the impending unification of streaming services HBO Max and Discovery Plus, which will include Discovery's recently-gobbled-up CNN+, as well. The new combined catalog of movies and shows will officially debut in Summer 2023. Warner Bros. Discovery is embroiled in a volatile restructuring phase as the company's newly appointed CEO, David Zaslav, attempts to adjust the studio's standing while amending myriad debt in the process.
The company's Q2 earnings proved it is straggling behind following the mega-merger of Warner Bros. and Discovery in May 2021. In its first quarterly report after the merger's finalization, the company already reported a loss of $3.4 billion and revenue of $9.8 billion, which missed Wall Street's estimates of $11.91 billion. As for subscriber numbers, which would be set across both HBO Max and Discovery Plus, Warner Bros. Discovery opted to combine the total direct-to-consumer base for both apps, making a grand total of 92.1 million, a 1.7 million bump from Q1.
According to Zaslav, the company's decision to roll both apps up into one service is due largely to Discovery Plus' more advanced tech stack, highlighting "performance and customer issues" that have plagued HBO Max for some time. Thus, Discovery Plus will act as the new foundation of the coupled service, with content from HBO Max being its driving force for adding subscribers long term.
"We think the product is going to be superb," explained Zaslav in the midst of the earnings call held yesterday. He also highlighted that much of what makes HBO Max so grand will remain in play, comforting the many various fans of HBO's elongated list of classic originals, from Westworld to Euphoria. His words come on the heels of high-profile cancellations, the most prominent among them being the $70 million Batgirl project, which was essentially months away from release.
Zaslav showcased a slide amid the earnings report, which sheds light on the various shows, brands, franchises, and characters that now make up the breadth of Warner Bros. Discovery. The list includes several of the most notable entertainment IP, including DC, Game of Thrones, Harry Potter, Friends, Looney Tunes, and much more. Yet, despite its new myriad of content, Warner Bros. Discovery still remains in dire straits as the firm tries to rectify its $13.605 billion in long-term debt.
Of main importance for the company right now is plugging this hole, which stems largely from, according to Zaslav, "Kids & Animation, CNN+, certain Turner originals, and select-to-HBO Max feature films." Warner Bros. Discovery CFO Gunnar Wiedenfels relayed amid the earnings call that a large chunk of kids and animation content will be cut "without an adequate investment case against them." HBO Max content will be its main priority, yet it will also be halting any new licensing deals as it works "back to a balanced level of monetization."
Rolling both products up into one service is a wild gamble that may well pay off in the long run. If subscribers from either service remain following both applications' merger, given that HBO Max remains the best-perceived value of any streaming service, it could make for a new well-rounded home of varied content. What the forthcoming merged app will be called and its associated pricing tiers remain uncertain, but Warner Bros. Discovery did highlight that both ad-supported and ad-free options will be included.
