HBO Max is undergoing some changes at the moment, in the wake of Warner Media’s merger with Discovery. While the big news was that the streaming service would eventually merge with Discovery Plus, comments from one of the key CEOs now suggest that we may have some price hikes to bear at some point in the future.
Gunnar Wiedenfels, chief financial officer of Warner Bros. Discovery, hinted at this while speaking at the Goldman Sachs Communacopia Tech on Tuesday (via CNBC (Opens in a new tab)). Wiedenfels said HBO Max and Discovery Plus are “essentially less priced” and that the company could have “a lot of room” to raise prices.
Wiedenfels believes that’s the case based on the strength of both services’ content libraries, and it’s on the back burner of 38 Emmys-winning HBO Max — more than any other streaming service. And that doesn’t include Warner Bros-made content for other services, such as Ted Lasso and Abbot Elementary, which also won awards on the show.
according to The Hollywood Reporter (Opens in a new tab)Wiedenfels used House of the Dragon as an example of how HBO Max is using marquee content to appeal to audiences, noting that 30 million people have already watched the first episode. HBO Max too It crashed after Game of Thrones debuted (Opens in a new tab)under the weight of everyone trying to adjust the first episode.
Wiedenfels notes that both HBO Max and Discovery plus aren’t ideal, but said that merging them both could benefit, arguing that HBO Max has an “amazing content offering” and “a lot of features to offer”, while Discovery Plus has a cleaner interface. So the idea is that the merger will see the best of the two services merge together (hopefully) into something better.
The CFO also highlighted another strength of Discovery Plus, which is that it offers “evergreen popularity”. There may not be “a lot of fuss” about the big offers that drive people to the service, but it’s “among the lowest in the industry..
In short, once people sign up for Discovery Plus, they tend to stick around for it — something Wiedenfels credits with brands like HGTV, Food, Magnolia, and Discovery itself. So, with the allure of “greenery,” the Discovery Plus/HBO Max hybrid should still have engaging content even during periods when there are no major HBO shows on the air.
That’s all well and good, but it doesn’t change the fact that Wiedenfels hinted at possible price increases. HBO Max already costs $15 per month without commercials (or $10 with it), making it one of the most affordable on-demand streaming services available. Meanwhile, Discovery Plus costs $5 per month with ads, and $7 per month without them.
All together, that’s about $15-22 a month, which doesn’t sound like “undervalued” to me. In fact, it’s quite expensive, and more than you’d pay for any other streaming service that doesn’t include live TV and likely contains ads. Given the current cost of living, I can’t imagine subscribers would respond particularly well to the prospect of paying more.
However, Wiedenfels confirmed that Warner Bros. Discovery has changed its tune since the merger, and doesn’t prioritize subscriber growth over profitability. Instead, the company is doing the opposite, i.e. working to ensure that the live broadcasting business is actually profitable.
Apparently, the focus on subscriber numbers is “old world flowing” thinking, so the company might not worry if a few people jump in. We’ll have to see how that happens.
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