November 7, 2022
Warner Bros. Discovery saw streaming subscriptions grow to almost 95 million globally in Q3 across HBO, HBO Max and Discovery+, propelled largely by “House of the Dragon,” the hotly anticipated “Game of Thrones” prequel. The buoyant performance prompted WBD CEO David Zaslav to announce on the earnings call that the company has accelerated the U.S. launch for the new streaming platform that combines HBO Max and Discovery+ to spring, rather than waiting until summer 2023 as originally planned. The growth translates to 2.8 million HBO, HBO Max and Discovery+ subscriptions added from Q2 to Q3 — 500,000 of them domestically.
Variety points out, by way of comparison, that competing streamer Netflix — the subject of much subscriber growth pressure this year — “added 2.41 million net new paid subscribers in Q3, including a gain of 100,000 in the U.S./Canada region.”
While Netflix stood at 223.1 million worldwide subs as of Q3, it has been streaming a lot longer, having launched in 2007, versus May 2020 for HBO Max. In the U.S., HBO Max is being offered ad-free for $14.99 per month and $9.99 per month with ads, while Discovery+ subscriptions cost $6.99 per month ad-free and $4.99 per month with ads.
JB Perrette, president and CEO of Discovery International and head of streaming, hinted at price increases, pointing out that HBO Max had not had a rate hike since its launch. “That’s an opportunity. We can probably move north from where the prices are today,” Perrette told analysts on the earnings call.
Netflix and Apple TV both raised subscription prices in recent months. Neither a name nor pricing for the combined HBO Max/Discovery+ streaming platform has been announced, though the company has said there would be commercial-free and ad-supported versions. The company is also said to be working on a FAST service using content from the Warner Bros. and Discovery catalogs.
Zaslav contextualized the company’s mandate, saying in the Q3 earnings release “we are reimagining and transforming the organization for the future while driving synergy enterprise-wide, increasing our target to at least $3.5 billion, and making significant progress on our combined DTC product. While we have lots more work to do, and there are some difficult decisions still to be made, we have total conviction in the opportunity ahead.”
Since Discovery closed its deal with AT&T to merge with WarnerMedia in April 2022 the global economy has faced economic adversity that experts expect to continue at least through early 2023. “The media giant posted revenue of $9.82 billion,” writes The Wall Street Journal, noting the figure would likely have been higher if not for a contracting advertising market.
Zaslav says he is looking to Warner Bros. for more franchises, along the lines of the “Superman” and “Harry Potter” worlds, saying the company is focused on the kind of films “people leave home to see.” He also said the company would seek to retain the NBA rights for TNT when its current deal expires at the end of the 2024-25 season, an expensive proposition, at more than $1 billion per season.