What the HBO Max Discovery+ merger means for streaming

eearlier this week, Film Twitter went into a joyless frenzy after hearing the news that Warner Bros. Discovery ( WBD ) has killed the upcoming movie Batgirl. The DC Comics movie was shot over seven months on a reported budget of $90 million — and now, thanks to an apparent executive’s finger-snapping, it’s vanishing into thin air. Others have noticed that several movies are only streaming on HBO Max, such as The witches and Locked, was quietly removed from the streamer. Rumors abounded that this all foreshadowed much bigger moves: that WBD was about to kill HBO Max; that it shuts down other fan-favorite shows like A peacemaker; that significant layoffs are ahead.

But those worst-case scenarios failed to materialize when the company announced earnings on Thursday. Instead, WBD announced the merger of HBO Max with another streaming platform, Discovery+, as well as several other key changes. Here are the key takeaways from the conversation and what they might mean for the future of a streaming industry that looks a lot more volatile than it did a year ago.

Read more: Welcome to the era of peak television excess

Your favorite HBO Max show hasn’t been removed yet

This week’s HBO Max debacle sparked a huge backlash from Hollywood creators who they feel their work is disrespected. But while many predicted the subsequent demise of other HBO Max shows, WBD CEO David Zaslav called the HBO brand “one of the great jewels in the company’s crown” and vowed to “embrace and support and then drive the incredible success that HBO Max is having.” This suggests that HBO Max’s acclaimed shows are similar Hacks, flight attendant, and A peacemaker are safe for now.

Zaslav, who took over the role following the merger of WarnerMedia and Discovery last spring, also appeared to refute recent reports of massive layoffs at HBO, saying, “Most of Casey’s people [Bloys, the head of HBO and HBO Max]The team at is locked in.” However, CFO Gunnar Wiedenfels said some Turner shows were at risk of cancellation; did not specify which ones.

Read more: The 21 Best Shows to Watch on HBO Max

But prestige is no longer HBO’s top priority

For decades, the name HBO has been associated with prestige and craftsmanship: a place where creators can make big changes, even if they aren’t immediately profitable. While Zaslav said the word “prestige” many times during the conversation, the moves he’s made over the past few months reveal a different approach than his predecessors at HBO. Zaslav is charged with paying billions of dollars in debtand said that in April that “every single solution it will be done through the lens of asset value analysis.”

Last month, HBO decided not to move forward with JJ Abrams’ sci-fi series Demimonde, whose budget was reportedly over $200 million. Tim Westcott, a media analyst at OMDIA, says greenlighting the show would be “something you would have expected HBO to do without being too concerned with the bottom line a few years ago. But obviously the management has changed and he has a much more purposeful approach.”

HBO Max announced this week that it will soon begin streaming multiple shows from Chip and Joanna Gaines’ television empire (Upper retainer), which may lack critical acclaim, but more than make up for it with broad appeal and viewership. In Thursday’s conversation, Zaslav announced that the duo is far from the only Discovery+ native joining the HBO Max family: all of that platform’s content (including Dr. Pimple Popper: It’s a Zit and Toddlers and tiaras: where are they now?) will be combined into a single, as-yet-unnamed, streaming service.

In introducing the fusion, Wiedenfels talked about how the audiences for HBO Max and Discovery+ are so different that they actually complement each other. However, the language of the accompanying slide was accused of sexism on social media:

You’ll be able to stream for free (with ads)

Wiedenfels said the merger between HBO Max and Discovery+ will first happen in the US in the summer of 2023, with launches in other regions of the world to follow. He said the new service will have three payment tiers: a free tier with ads; discounted tier with minimal ads; and ad-free premium tier. The announcement came amid Netflix’s decision to add a cheaper ad-supported subscription.

Read more: Ads are officially coming to Netflix. Here’s what that means for you

Movie lovers will have to go back to the theaters

When movie theaters closed due to the pandemic two years ago, many analysts predicted that a new era of movie streaming was coming, in which viewers would get used to watching movies from their couches.

Zaslav firmly rejected that narrative on Thursday, saying the company would “fully embrace theater art.” He says the company has no more stream movies at the same time both in theaters, and that streaming projects like Batgirl it won’t be part of their strategy at all. “This idea of ​​expensive movies going to streaming: we can’t find an economic case or value for that,” he said. (Meanwhile, Netflix just green light to continue to its $200 million Gray man action thriller.)

Wiedenfels added that the cancellation of projects that were already in production, similarly Batgirl, Scoob: Holiday Hauntand The Wonder Twins— were “difficult decisions, but we are committed to being disciplined around a framework that guides our content investments for maximum return.”

Superheroes, forever

Given the astonishing global success of the Marvel Cinematic Universe, it’s perhaps unsurprising that WBD wants to replicate that with its DC Extended Universe. Zaslav actually said the company is in the process of building a 10-year plan modeled after Marvel’s Kevin Feige — so get ready for a lot more from Wonder Woman, Aquaman, and the rest of the Justice League gang. “As we look at the opportunities we have overall, DC is at the top of the list for us,” Zaslav said.

Zaslav even mentioned the upcoming battles The lightning film as one of the films he was “very excited about”. (The lightningstar of Ezra Miller had several run-ins with the law recently.) In explaining the ax decision BatgirlZaslav said, “We’re not going to release a movie unless we believe in it…Our job is to protect the DC brand.”

The big tent approach is winning

Should streaming services be specialized by taste or should there be something for everyone? Streaming companies have taken different strategies on this: Disney+ has gone all-in on family programming (although the parent company captures different audiences with Hulu and ESPN+), while Netflix has tried to cast as wide a net as possible.

The merger of HBO Max and Discovery+, two dedicated platforms, perhaps shows that the one-channel approach is not viable for large corporations. Despite a recent study showing that HBO Max has the highest level to customer satisfaction, WBD decided they could make more money by pairing it with Shark Week. It seems that with each new earnings call, the certainty that we’re headed back to a world similar to cable bundles increases.

Westcott, the analyst, says it’s become clear that most people won’t pay for more than a few streaming subscriptions, especially with “inflation, the threat of a recession and people with less money in their pockets.” He points to the fact that in Europe the Paramount Pictures, Peacock and Universal titles are are already uniting instead of having to compete with each other.

WBD’s moves continue that trend — and also reveal the growing importance of courting not just a rich subscriber base in the US, but around the world. “Netflix, Apple and Amazon are global platforms in a way that maybe HBO wasn’t: the US was still their core market,” says Westcott. “So when you’re developing a content plan for a streaming service, you have to think about the international market as well.”

More must-see stories from TIME

Contact us at [email protected].

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *