Discovery is planning to consolidate its two biggest streaming platforms, HBO Max and Discovery+ and it’s likely to result in a significant number of layoffs in order to save $3 billion in merger costs.
The announcement is expected to be made on Thursday afternoon by Warner Bros. Discovery CEO David Zaslav before the companies’ upcoming quarterly earnings report at 4:30pm.
Despite the fact Discovery+ has 22 million subscribers, and HBO Max, together with its HBO television network, has 73.8 million subscribers, it is HBO Max that is likely to be gutted.
HBO Max, which has 73.8 million subscribers is likely to be gutted in the merger with a Discovery
Discovery+ focuses mainly on non-fiction productions and has 22 million subscribers
HBO content chief Casey Bloys will likely take on a more senior position once consolidation is complete, reports The Wrap.
Bloys could take on a role where he oversees overall content on the platform including HBO’s scripted shows and Discovery’s nonfiction offerings which include content produced for cable channels Discovery, TLC, Animal Planet, Food Network, HGTV, History among others.
The merging of the platform comes as a number of other cost-cutting measures appeared to be coming into force including a shock announcement of the scrapping of the $90 million DC Batgirl girl film.
Other signs of ‘distress’ have also occurred with the shuttering of productions and removing content in search of tax write-offs.
The announcement is expected to be made on Thursday afternoon by Warner Bros. Discovery CEO David Zaslav before the companies’ upcoming quarterly earnings report at 4:30pm
HBO Max is also said to have discreetly removed six original films from the streamer.
‘Everyone in Warner Bros. Discovery is nervous at the moment, and [they’re] starting to look at alternative job options in case they get the axe,’ an insider told The Wrap.
‘Sounds like they’re not doing HBO Max scripted shows anymore with HBO taking over, so less scripted shows overall.’
‘All I know is they’re folding HBO Max into HBO, and there will be redundancies,’ they added.
The merging of the two services is not a total surprise.
This year, Warner Bros. has returned to exclusive theatrical windows for at least 45 days before sending movies to HBO Max
The idea was floated in March when Chief Financial Officer Gunnar Wiedenfels provided concrete details as to the plan once the the acquisition of WarnerMedia had closed.
At the time, Wiedenfels said the services would unite to create a more broadly appealing consumer product, with HBO Max’s more ‘male skewing’ scripted series complementing Discovery’s reality shows, with their heavily female viewership.
The melding of the two services, following the completion of Discovery’s $43 billion acquisition of AT&T’s WarnerMedia in a deal announced in May 2021, had long been anticipated.
Wiedenfels said the company would need to ‘harmonize’ the separate technology platforms to offer a single streaming product, with more than 200,000 hours of movies and television episodes.
There will be an ad-free service and a less expensive, ad-supported tier.
Under new Zaslav, Warner Bros. is shifting its strategy on film releases and trimming costs.
Fox Business journalist Charles Gasparino revealed the plans for HBO Max and Discovery+ in a tweet on Wednesday afternoon
Under previous chief executive Jason Kilar and partly as a pandemic response, the studio implemented day-and-date releases in 2021, opening films simultaneously in theaters and on HBO Max.
Films, like ‘Batgirl,’ were to be produced solely for HBO Max.
Warner Bros. had committed to making movies that could go straight to HBO Max, as part of an effort to boost subscribers in the increasingly crowded streaming sector.
The decision, which was driven partially by a need to bypass Covid-hit theaters in 2021, was not popular among creatives and appears to have been rolled back after the tie-up with Discovery.
This year, Warner Bros. has returned to exclusive theatrical windows for at least 45 days before sending movies to HBO Max.
While ‘Batgirl’ wasn’t as pricey as many superhero films, which typically cost $150-200 million to make, it was to be a bigger budget movie for an HBO Max title.
Zaslav has maintained larger budgeted movies are best served by a theatrical rollout, but marketing a movie like ‘Batgirl’ for that kind of release would have required tens of millions more.
The Batgirl film has been ‘canned’ by Warner Bros. after spending more than $90m on the movie because studio executives want to move away from made-for-streaming projects