Things are about to get a bit confusing over at Warner Bros. Discovery, but the moves the media company is making will mean more streaming options for its audience.
Warner Bros. Discovery (WBD) is the parent company of a media empire that includes HBO, HBO Max, Discovery+, CNN, Cartoon Network, HGTV, and TNT among others.
The new joint company has had some growing pains as it searches for the right way to navigate the ever-changing streaming landscape, and this week it is making big changes to the way it will integrate all of its content across multiple streaming platforms.
Warner Bros. Discovery is now abandoning plans to completely merge two of its streaming services, HBO Max and Discovery+, onto one giant platform.
The company had planned to merge the two services following the $43 billion merger between Warner Bros. and Discovery last spring, but those plans are now on the shelf, according to The Wall Street Journal.
So instead of combining HBO Max and Discover+, Warner Discovery will unveil a new platform that will feature HBO Max content and most Discovery+ content with Discover+ still remaining available as a stand-alone option, sources told The Journal.
The thinking behind the move is that the 20 million Discover+ subscribers may not want to pay a higher price point for HBO Max content that they may not want.
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Warner Discovery Subscription Options
Currently, Discovery+ without ads costs $6.99 per month while the ad-supported tier costs $4.99 a month.
Meanwhile, HBO Max costs $15.99 a month without ads and $9.99 with ads. Max is already on the more expensive side of the streaming wars, but the upcoming combined platform is likely to be even more expensive, according to the report.
Part of the reason the company is hesitant to make a full integration is that Discovery+ actually turns a profit as the reality television heavy lineup on Discovery+ is mostly low cost compared to the scripted prestige television lineup on HBO Max.
Cost Cuts at HBO Max
Back in its heyday, HBO was the crown jewel of prestige television.
The subscription network dominated television's Emmy Awards with shows like The Sopranos and The Wire. Not much has changed, as HBO and HBO MAX received 140 nominations, 10 more than it garnered the previous year, at the 2022 Emmy's.
But the company has been open about its plan to find $3 billion in cost synergies from the merger. New CEO David Zaslav indicated that the company is just a third of the way through its cost-cutting strategy.
"We've been able to dig deeper into the financials and have gained a much better, more complete picture of where we are and the path forward, including identifying some additional and unexpected challenges that have and will continue to require our focus and attention," Zaslav said during the August earnings call, his second with the company.
"Our focus is on shaping a real business with significant global ambition, but not one that solely chases subscribers at any cost or blindly seeks to win the content spending wars," he said.
