HBO High Price 2023 for Warner Bros. Discovery ‘opportunity’ has increased

By | November 6, 2022

The price of HBO Max may soon increase – although Warner Bros. As Discovery accelerates plans to bundle HBO Max and Discovery+ together next year.

HBO Max will not increase its $14.99 per month ad-free tier starting in May 2020, said JB Perrette, president and CEO of Worldwide Streaming and Gaming at Warner Bros. Discovery, he pointed out on the company’s Q3 earnings call. In the year By 2023, “it could be three years before prices change, which we think is an opportunity, especially in this environment.”

“We really believe there’s some pricing advantage for us in ad-free. [HBO Max] Service and maybe we can go north of where the prices are today,” Perrette said.

At the same time, Warner Bros. Discovery moved up its planned U.S. launch of its integrated HBO Max-Discovery+ platform to spring 2023, a quarter earlier than previously thought, CEO David Zaslav said on the call.

Additionally, Zaslav said, WBD will “aggressively” attack the low-end streaming market with its own free, ad-supported streaming TV (Instant) offering to launch in 2023. “Browse” the search to FAST. “As a company with the largest film and TV library in the industry, we have a unique opportunity to increase our addressable market and drive real value, and we plan to move quickly,” said Zaslav Avered.

Company executives did not discuss what the price (or name) of the HBO Max-Discovery+ combo would be. Perrette said pricing is one of the key things that “makes our products come together in particular,” adding that “broader positioning allows us to go from a product that’s a little more tailored to certain people” to a product that appeals to everyone in the family.

SEE ALSO: David Zaslav inks deal with JK Rowling on more ‘Harry Potter’ content

WBD can add value to its direct-to-streaming services globally, Perrette said. “When we look globally, our wholesale and retail ARPUs [average revenue per customer] They are meaningfully smaller than the market leaders. And when we think about the new opportunity and ability [HBO Max-Discovery+] A product that comes to market and also some initiatives before the new product comes to market to grow on ARPU globally.

In the third quarter, after Warner Bros. Discovery closed its acquisition of WarnerMedia, undisclosed HBO/HBO Max subtotals, direct-to-consumer bundles worldwide rose 2.8 million across HBO, HBO Max, Discovery+ and small DTC. Streams. In the US and Canada, the company only added 500,000 subscribers. The direct-to-consumer segment’s EBITDA loss more than doubled year over year, from $309 million (on a forma basis) in Q3 2021 to $634 million in the most recent quarter.

Zaslav blamed the slow Q3 growth in part on the “shortcomings” of existing streaming platforms. “The fact that we’ve been able to grow nearly 3 million subscribers outside of the U.S. without a lot of promotion and on a platform that’s not great, we think that’s really exciting as we roll out more broadly,” he said.

Zaslav cites two examples of how Warner Bros.’s discovery team is working to improve the service ahead of the merger. First, HBO Max is starting to release a completion card after someone finishes watching a series that recommends other programs, “a clear way to drive better consumer engagement,” he said. Second, WBD has begun experimenting with bringing Discovery+ content to HBO Max. He said it was a top-five show on HBO Max after just a few days on the service, picking up shows like “Fixer Upper: The Castle” from the Magnolia Network. “These early green shoots reinforce our strategic theory that the two content offerings work well together and, when combined, drive greater engagement, lower churn and higher customer lifetime value,” commented Zaslav.

Planned for an early launch next year, Zaslav said WDD’s library has a “huge amount of content” that isn’t on HBO Max and isn’t being monetized, and is almost completely depleted. “[T]There are too many people here who don’t want to pay. And we can get them to spend time with us, we think with an economic model that is very profitable with our peers. Then as we learn more, we can move the content into that ecosystem,” he said.

Meanwhile, Perrette says, WBD is “a little surprised” that more subscribers haven’t moved to the HBO Max With Ads plan ($9.99 a month in the US). This, he said, gives confidence that the company will increase its non-advertised rates and increase the ad load on its ad-supported plans. Today, HBO Max With Ads runs 2-3 three-minute ads per hour, about half of Discovery+’s ad load. That means Warner Bros. Discovery will have “nearly 100% growth in inventory for us as we look to combine the advertising burdens of those two products,” he said.

Warner Bros. Discovery reported Q3 revenue of $9.82 billion, down 8 percent year-over-year, and a net loss of $2.3 billion. And writing.

Q3 restructuring charges included $891 million of content impairment, $238 million of corporate restructuring costs, other content development costs and write-downs of $377 million and contract termination costs of $15 million.

In the call Thursday, Zaslav again defended the content writers. “We haven’t put on a show on stage that can help us in any way.” Warner Bros. Discovery continues, “It can invest in existing knowledge and replace those shows with content that has the potential to be more successful. To generate real value and find content that doesn’t work.

Category: tv

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