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Future of TV Warner Bros Discovery Brand Strategy

Warner Bros Discovery ‘wrong’ to merge HBO Max and Discovery+

By Hunter Terry, Vice-president of solutions consulting and CTV commercial lead

August 5, 2022 | 3 min read

In Warner Bros Discovery’s Q2 earnings call yesterday (August 5) the newly-merged companies said their streamers would be folded into one. As of summer 2023, HBO Max and Discovery+ will be one consolidated service, with both an “ad-lite” and an ad-free version available in markets across the globe.

HBO Max and Discovery+ folded into one mega streamer

HBO Max and Discovery+ have folded into one mega streamer

Hunter Terry, vice-president of solutions consulting and CTV commercial lead at Lotame, says the company is making a mistake.

HBO Max’s scripted content and the unscripted content from Discovery+ might seem like a match made in heaven, but Warner Bros Discovery is headed in the wrong direction, despite the extreme opportunity available to it.

Instead of touting its 95 million subscribers across Discovery+, HBO Max and HBO television in a similar fashion as Disney’s marketed Disney+, ESPN+ and Hulu bundle, Warner Bros Discovery boss David Zaslav looks to be disintegrating HBO Max entirely.

It is canning hugely-anticipated scripted projects and investing purely in unscripted content that has been a Discovery staple for decades – despite the fact that Discovery+ only accounts for about 25% of its overall subscriber base. Is it favoritism or is it villainy?

Unfortunately, merging the larger streaming app and library (HBO Max) into the smaller (Discovery+) is unlikely to yield multiples over their individual value. It would make more sense to have the smaller Discovery+ coalesce in the HBO Max app. With roughly 100 million subscribers, Warner Bros Discovery has an extreme opportunity to go toe to toe with Disney’s 140 million subscribers by keeping HBO Max and Discovery+ separate and potentially providing a discounted subscription package for viewers who would like to sign up for both, not to mention the HBO television network.

It could have even contemplated bringing back CNN+ in the near future to add to the variety. But no longer, it seems.

It is worrisome to see Warner Bros Discovery move in this direction, which is magnified by the fact that it had an edge when it came to content spend, which it is now leaning away from. HBO Max and Discovery+ combined annual content spend is around $20m compared to Netflix’s $17m and Disney’s $14-16m.

In the few months since its creation, Warner Bros Discovery has canceled the HBO Max Batgirl development (which it had sunk $90m into already), canceled six other original HBO Max streaming films and wound down CNN+.

Zaslav previously stated after the merger that he envisions reaching 400 million subscribers with the combined entity, but with his sights set on destroying the HBO Max brand entirely, it should continue shedding subscribers for the foreseeable future. It makes you wonder – is Zaslav secretly the super-villain here?

Future of TV Warner Bros Discovery Brand Strategy

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