Warner Bros Discovery on Wednesday said it will launch on May 23 its long-awaited new streaming service, christened "Max", combining HBO Max's scripted entertainment with Discovery's reality shows.
The service will seek to expand its reach beyond devotees of
HBO's acclaimed and edgy shows by incorporating unscripted fare and children's
programming.
It also will mine the studio's rich content library to
produce high-profile programming, including a new series based on the Harry
Potter books by author JK Rowling, and another prequel to popular fantasy
series Game of Thrones.
Warner Bros, Walt Disney and other media companies are
seeking to strike the right balance between spending on fresh programming to
attract and retain subscribers and turning a profit.
Shares in Warner Bros Discovery closed down nearly 6
percent, part of a broader decline in streaming stocks after critical remarks
from renowned investor Warren Buffett.
"It's not really a very good business," Buffett
said on CNBC television. While people working in entertainment "make lots
of money, the shareholders really haven't done that great over time".
Buffett is an investor in Paramount Global, which dropped 3
percent on Wednesday. Disney fell 2.5 percent and Netflix was down 2 percent.
The new "Max" service will serve as a test of CEO
David Zaslav's ambition to create one of the world's leading streaming services
by assembling a collection of disparate assets, from the Barefoot Contessa
cooking show to Batman.
"This is our time, this is our chance," Zaslav
said during a presentation held on the Warner studio lot in Burbank,
California. "I feel like for our company, this is our rendezvous with
destiny."
Prices for Max would range $9.99 a month for the
ad-supported version to $19.99 a month for "Max Ultimate" for the
ad-free tier with four concurrent streams. One tier would retain the current
HBO Max pricing of $15.99 a month - a strategy that won praise from one media
analyst.
"By keeping the pricing the same, except for the new
premium tier, there's no reason for anybody to churn off," said Bank of
America media analyst Jessica Reif Ehrlich. "For the same price you're
getting multiples of content."
Zaslav said HBO's "one-of-a-kind storytelling"
would bring subscribers to the service while Discovery's unscripted programming
would keep them.
Warner Bros Discovery eliminated "HBO" from the
name of the streaming service, which for some viewers connotes bespoke series
but repels others.
Global streaming chief JB Perrette said, "HBO is
HBO" and it "should not be pushed to the breaking point" by
taking on a wide variety of content offered by HBO and Discovery.
"We look to go broader," Perrette said, "And
we think we can compete with the biggest players in the space."
The service will feature HBO content including multiple Emmy
award-winning drama series Succession and hit video-game adaptation The Last of
Us.
New titles
It will also have several new titles based on popular
franchises, including The Penguin, a series based on the DC Comics villain, a
new comedy series derived from the hit CBS show The Big Bang Theory, and a new
installment in the Fixer Upper home improvement franchise, Fixer Upper: The
Hotel.
CEO Zaslav has said Warner Bros films would enjoy a
traditional theatrical release and reap box office proceeds before becoming
available on the streaming service.
The opportunity to better capitalize on the streaming video
revolution was one of the justifications for the merger of Discovery and
WarnerMedia in 2022.
But by the time the deal closed in April last year, Wall
Street's enthusiasm for streaming had begun to wane, as Netflix reported its
first loss of subscribers in more than a decade. Investors began prioritizing
profits over subscriber gains, ushering in a new frugality across Hollywood.
Like other media companies, Warner Bros Discovery has yet to
turn a profit on its HBO Max and Discovery+ streaming services, though the
company has reduced losses from them.
It has set a subscriber goal of 130 million by 2025, well
below Netflix's 231 million subscribers. © Reuters