A new streaming service that combines the content libraries of Warner Bros and Discovery may come with a price increase beyond what customers are currently paying for HBO Max and Discovery Plus, an executive with Warner Bros Discovery hinted at an investor conference this week.
On Tuesday, Warner Bros Discovery (WBD) Chief Financial Officer Gunnar Wiedenfels said he believed both HBO Max and Discovery Plus were “underpriced” because of the amount of content available in each service, strongly suggesting that a combined streaming service coming next year may also come with a higher price point.
Currently, streaming TV viewers who want access to HBO Max pay between $10 a month and $15 a month, depending on their tolerance for advertisements. The same element is true for Discovery Plus, where customers pay between $5 a month and $8 a month for that service.
“Unfortunately, both are not perfect right now,” Wiedenfels said at the Goldman Sachs Communacopia conference.
Next year, WBD plans to scrap both streaming services and unify the content from the WBD portfolios into a single product. The service has not been named, nor is it clear how much it will cost.
“We have to…[take] the best parts of both platforms and rebuild a new state-of-the-art structure, and that’s going to take a little while,” the executive affirmed on Tuesday.
Wiedenfels said HBO Max has the best content of the bunch, as proven by Monday evening’s Emmys (the network won more awards this year than any of its competitors). But that content only convinces customers to stick around for so long: When a TV show ends for the season, or a movie is pulled form the service, customers cancel their subscription and switch to a competitor.
Discovery, on the other hand, has more “evergreen” content — competition, lifestyle and knowledge shows that can be binged year-round. While Discovery’s reality-based content may not generate as much social media buzz, the shows are generally cheaper to produce and appeal to a wide variety of consumers.
“The thesis [is,] by combining the two, we’re creating a very, very compelling package,” Wiedenfels said.
Less clear is how live conent like cable news and sports fits into the streaming product offering. When WarnerMedia merged with Discovery earlier this year, it brought with it the CNN and HLN cable channels domestically as well as CNN International — three channels that, so far, Discovery has been willing to maintain.
The fused company also brought sports rights into the fold, which Discovery is no stranger to: In Europe, the company operates Eurosport, a successful multiplex sports network that has broad carriage on cable, satellite and streaming platforms there. Closer to home, WBD’s general entertainment cable networks TBS and TNT carry professional baseball, basketball and hockey games.
But things are different between the two continents: In Europe, linear television is still widely viewed as the best way to watch content, and appointment television is offset by “catch up” channels that time-shift programming by as much as 24 hours. In the United States, television viewers have moved from expensive cable and satellite packages to cheaper, online-only offerings like HBO Max and Discovery Plus.
Wiedenfels said WBD is still evaluating the best ways to offer its live sports and news content to consumers beyond the bundle — “over time, we can talk about news, sports, etc.,” he said on Tuesday — as it remains laser focused on fusing together the best content it offers on HBO Max and Discovery Plus.
“In terms of how exactly we’re going to manage that transition, that’s something that obviously, as you would imagine, the teams are working through in a lot of detail right now,” he affirmed. “As we get closer to the launch date, we’re going to be talking more about the more tactical elements of this.”
