Warner Bros. Discovery announced its new mixed streaming service of HBO Max and Discovery+ called “Max” on Wednesday.
The new streaming platform will combine scripted dramas like HBO’s “Succession,” “White Lotus,” and “House of the Dragon” with Discovery’s unscripted staples like cooking, home improvement, and survival shows.
The new service will start on May 23rd.
“Max is the one to watch because it’s home to shows that have an outsized impact on people and culture,” said David Zaslav, Discovery CEO, during a presentation in Burbank, California. “It’s the streaming version of must-see TV.”
Warner Bros. Discovery executives have been planning the merger of HBO Max and Discovery+ for more than a year as part of the rationale for the merger of Discovery Communications and WarnerMedia, which have been divested AT&T in April 2022.
Pricing remains the same as the current HBO Max plans: $9.99 per month with ads and $15.99 per month without ads. A new tier for $19.99 called Max Ultimate Ad Free allows for four simultaneous streams at up to 4K resolution and 100 offline downloads.
“We have a very significant business with HBO Max. Bringing more value to these subs and having a seamless transition is going to be really helpful for us,” Zaslav said in an interview with CNBC’s Julia Boorstin on Wednesday’s Closing Bell. He added that the company believes bringing more content to a streaming service will reduce the number of people unsubscribing.
The service will add several new series, including a DC Comics series The Penguin, a show derived from the tent-pole sitcom The Big Bang Theory, and new series from Chip and Joanna Gaines’ Magnolia Network .
The company also announced a new Game of Thrones spinoff prequel and series based on the Harry Potter franchise, starring author JK Rowling.
Max is supposed to enable Warner Bros. Discovery to keep up better Netflix And Disney’s Suite of streaming services (Disney+, Hulu, and ESPN+) worldwide as the streaming wars mature in the years to come. Zaslav has predicted that his company’s direct-to-consumer products will break even in 2024 and hit $1 billion in profit by 2025.
“It gives us a huge opportunity as a company,” he said. “Together, these studios allow us to control our own destiny. They give us long-term business options. We are the largest and most successful content producer in this industry.”
Legacy media companies have shifted away from traditional pay-TV and developed their own subscription streaming products as millions of Americans quit cable each year.
“It’s not an easy deal and we’re in the middle of a transition,” Zaslav said on CNBC on Wednesday.
Warner Bros. Discovery had more than 96 million worldwide streaming subscribers to HBO Max, HBO or Discovery+ at the end of the fourth quarter. About 55 million of these customers came from the USA and Canada. Average monthly revenue per user was $7.58.
“Keeping on substitutions is just as important as adding substitutions,” Zaslav said on Wednesday.
The CEO later added in CNBC’s Closing Bell that he would “rather have 100 million or 150 million subscribers and be really profitable than try to stretch for a big number and end up losing money.”
Max will include new tech features including the introduction of a default child profile with parental controls. The company also announced expanded personalization, a new content navigation menu at the top of the app, and prominent promotions for featured brands and genres.
Company executives said in previous investor calls that a focus of the new service would be revamping and improving its technology. On Wednesday, Streaming and Gaming CEO JB Perrette noted that three-quarters of HBO Max viewers come only from the home screen, compared to Discovery+, where the majority of usage comes from screens deeper in the app.
On the launch date of the new service, HBO Max will be updated as the Max app for the majority of users. Some users on certain platforms will be prompted to make the switch when they enter the app, Perrette said.
Discovery+ as an app remains unaffected, with Perrette noting that the company “doesn’t want to leave any of its profitable subscribers behind.”
Disclosure: Comcast, which owns CNBC parent company NBCUniversal, is a co-owner of Hulu.
— CNBC’s Julia Boorstin contributed to this report.
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