HBO Max and Discovery Plus Expected to Merge Into One Platform This Summer

Iesha March 16, 2022 News Leave a comment

Discovery, which is set to become Warner Bros. Discovery within the next month, plans to combine its current streaming service Discovery Plus with WarnerMedia‘s HBO Max rather than separating the two services.

On Monday during the Deutsche Bank 30th Annual Media, Internet & Telecom Conference, Discovery CFO Gunnar Wiedenfels, who will also serve as CFO of the newly combined Warner Bros. Discovery, said there has been speculation that Discovery may remain a solo streaming platform with bundling options despite plans to connect Discovery Plus and HBO Max.

According to Wiedenfels, the first step of the integration will be to bundle the two platforms while the new company figures out how to merge them.

“One of the most important items here is that we believe in a combined product as opposed to a bundle… We believe that the breadth and depth of this content offering are going to be a phenomenal consumer value proposition,” Wiedenfels said. “The question is, in order to get to that point and do it in a way that’s actually a great user experience for our subscribers, that’s going to take some time. Again, that’s nothing that’s going to happen in weeks — hopefully not in years, but in several months — and we will start working on an interim solution in the meantime. So right out of the gate, we’re working on getting the bundling approach ready, maybe a single sign-on, maybe ingesting content into the other product, etc., so that we can start to get some benefits early on. But the main thrust is going to be harmonizing the technology platform. Building one very, very strong combined direct-to-consumer product and platform, that’s going to take a while.”

Discovery Plus costs $4.99 per month with advertisements or $6.99 without ads. It accounts for the majority of Discovery’s streaming sub-total of 22 million global consumers as of the end of 2021.

Last year, HBO Max and HBO had a combined global subscriber base of 73.8 million. HBO Max is available for $9.99 per month with advertisements or $14.99 without ads.

Gunnar did not say how much the combined streaming platform would cost consumers on Monday, but he did say Warner Bros. Discovery will offer both ad-free and ad-lite options.

“The direct-to-consumer business is obviously further along now than what we had four years ago,” Wiedenfels said. “There’s a greater risk, you want to get that right. Between the two direct-to-consumer products, by the time we close, close to 100 million people are going to be affected as we make those changes. So that will need some very, very detailed and disciplined planning.”

Following Discovery shareholders’ approval decision on Friday, Wiedenfels believes the $43 billion Discovery-WarnerMedia merger will close early in the second quarter between April 11-28.

Weidenfeld anticipates a “blowout DTC product” with the merger of HBO Max and Discovery Plus once WarnerMedia is officially in Discovery’s hands and believes the Discovery and WarnerMedia brands would have “some very nice marketing synergy right out of the gate.”

“The combination could not make more sense than what we’re doing here,” Wiedenfels said. “We have HBO Max, with a more premium, male-skewing positioning, and then you’ve got the the female-positioning on the Discovery side. You’ve got the daily engagement that people enjoy with Discovery content versus sort of the event-driven nature of the HBO Max content. Take that together, I have no doubt that we will be creating one of the most complete, sort of four quadrant, old-young-male-female products out there. And I’m really excited about it. I can’t wait to see the first combined direct-to-consumer metrics because, in theory, the acquisition power of HBO Max, combined with the retention power of the Discovery content I think is going to make for a blowout DTC product, and that should certainly drive very healthy revenue growth for years to come.”