Discovery Warner Bros on Wednesday unveiled its new mixed streaming service HBO Max and Discovery+, dubbed ‘Max’.
The new streaming platform will mix scripted dramas corresponding to HBO’s “Succession”, “White Lotus” and “House of the Dragon” with Discovery’s non-scripted staples corresponding to cooking, DIY and survival shows.
The new service shall be launched on May 23.
“Max is one to look at since it’s home to shows which have a huge effect on people and culture,” Discovery CEO David Zaslav said at a presentation in Burbank, California. “It is a must-see version of TV on streaming.”
Warner Bros. executives Discovery planned to merge HBO Max and Discovery+ for over a 12 months as a part of the justification for the merger of Discovery Communications and WarnerMedia, from which it divested AT&T in April 2022
Pricing will remain similar to current HBO Max plans: $9.99 a month with ads and $15.99 a month without ads. The new $19.99 tier, labeled “Max Ultimate Ad Free,” will allow for 4 simultaneous streams at as much as 4K resolution and 100 offline downloads.
Warner Bros. shares Discovery fell greater than 6% on Wednesday. The stock is up 48% because the starting of the 12 months.
“Now we have a vital business with HBO Max. Providing more value to those subscribers and a smooth transition shall be really helpful for us,” Zaslav said in an interview with CNBC’s Julia Boorstin on Wednesday’s “Closing Bell.” He added that the corporate believes that putting more content on one streaming service will reduce the number of individuals unsubscribing.
The service will add several new series, including the DC Comics series “The Penguin”, a series derived from the sitcom “The Big Bang Theory”, in addition to Chip and Joanna Gaines’ new Magnolia Network series.
The corporate also announced a new Game of Thrones prequel and a series based on the Harry Potter series, starring writer JK Rowling.
Max should let Warner Bros. Discovery higher compete with Netflix AND Disney bundle of streaming services (Disney+, Hulu and ESPN+) worldwide because the streaming wars mature in the approaching years. Zaslav predicted that his company’s direct-to-consumer products would break even in 2024 and generate $1 billion in profit by 2025.
“It gives us an enormous opportunity as an organization,” he said. “Together, these studies allow us to manage our own destiny. They provide us long-term business optionality. We’re the most important and most successful content creator within the industry.”
Traditional media corporations have moved away from traditional pay TV and built their very own subscription streaming products tens of millions of Americans surrender cable TV every 12 months.
“It isn’t a simple business, and we’re within the midst of a transition,” Zaslav told CNBC Wednesday.
At the top of the fourth quarter, Warner Bros. Discovery had over 96 million streaming subscribers worldwide, with HBO Max, HBO or Discovery+. About 55 million of those customers were from the US and Canada. The common monthly revenue per user was $7.58.
“Keeping a subscription is just as vital as adding a subscription,” Zaslav said on Wednesday.
The CEO later added on CNBC’s “Closing Bell” that he “would reasonably have 100 or 150 million subscribers and be really profitable than attempt to rack up a big number and find yourself losing money.”
Max will include new technical features, including the launch of a default profile for kids with parental controls. The corporate also announced expanded personalization, a new content navigation menu at the highest of the app, and standout promotions on featured brands and genres.
The corporate’s executives said in earlier discussions with investors that the new service would give attention to rebuilding and enhancing its technology. On Wednesday, JB Perrette, general manager of streaming and gaming, noted that three-quarters of HBO Max’s viewership comes from the house screen alone, in comparison with Discovery+, where most usage comes from screens deeper within the app.
On the launch day of the new service, HBO Max will update because the Max app for many users. Perrette said some users on certain platforms shall be asked to make a change once they enter the app.
Discovery+ as an app will remain unaffected, with Perrette noting that the corporate “doesn’t want to depart any of its profitable subscribers behind.”
Disclosure: Comcast, which owns CNBC’s parent NBCUniversal, is co-owner of Hulu.
— CNBC Julia Boorstin contributed to this report.