- Warner Bros. Discovery announced its long-anticipated streaming service on Wednesday.
- The new app, Max, will offer content from HBO Max and Discovery+, a bid to drive growth as linear TV declines.
Warner Bros. Discovery announced the details of its new streaming app on Wednesday, after much anticipation from Hollywood and Wall Street.
The service, called Max, will combine HBO's premium scripted content and originals like "Succession" with Discovery+'s lower-brow reality programming like "90-Day Fiancé," as well as Warner Bros. films and the DC Universe.
The service, with the tagline "The One to Watch," will debut May 23 in the US, with international rollouts to follow in markets where HBO Max is available. The prices will stay the same for HBO Max subscribers, who will begin to be automatically ported over to the new service. A third, higher-priced option will offer increased streams, sound quality, and resolution.
Here are the options:
- Max Ad-Lite: An ad-supported version costing $9.99 per month with two concurrent streams and no offline downloads
- Max Ad Free: an ad-free version costing $15.99 per month and allowing two concurrent streams and 30 online downloads
- Max Ultimate Ad Free: a new $19.99 per month tier including four concurrent streams, 100 offline downloads, and up to 4K UHD resolution
On hand to introduce the service at an event on the Warner Bros. lot in Burbank, California, were CEO David Zaslav, streaming chief JB Perrette, US networks head Kathleen Finch, and HBO content chair Casey Bloys.
"Consumers are overloaded," Perrette said in prepared remarks. "In this era of peak confusion, we're trying to simplify for consumers ... Max will have a broad array of quality choices for everybody."
WBD is calling Max an "enhanced app" and listed a variety of features it hopes will entice people to subscribe and renew, including smooth video playback, personalization, and simplified navigation. Kids content also will be more prominent, addressing an acknowledged shortcoming in HBO Max's offering.
The company also used the event to showcase a variety of new programming coming to the app, aimed at seemingly every demographic and interest. Bloys said Max would feature 40 new titles per month and new forthcoming series "The Penguin," a prequel origin story of "It," and a spinoff of "The Big Bang Theory."
He also announced the newest installment from the "Game of Thrones" universe, called "A Knight of the Seven Kingdoms: The Hedge Knight," and the first Harry Potter live action TV series.
"We're not a giant undifferentiated blob of programming," he said.
A marketing campaign featuring some of the portfolio's biggest stars like Issa Rae and Joanna Gaines will blanket WBD channels in the weeks leading up to the launch.
WBD has a lot riding on the success of Max. Building a profitable streaming business is a huge part of the company's plan to justify its 2022 merger that combined AT&T's WarnerMedia and Discovery. The new streamer has to not only lower costs and churn for the company but also grow its subscriber base with a breadth of content and new features. The company sped up its timeline to launch the app this spring, a few months ahead of the original planned date of summer 2023. It's expanded the content available for ads on HBO Max, a move that's expected to carry over to the new app.
But it faces big headwinds. The linear TV business that WBD heavily depends on is declining faster than expected, and Netflix's big correction of 2022 has cast new doubt on streaming's profit potential. Wall Street wasn't initially impressed — WBD's stock declined nearly 6% Wednesday.
HBO Max and Discovery+'s combined subscribership (which, including HBO, topped 96 million at the end of 2022) is currently dwarfed by Netflix, which has 231 million global subscribers and is widely considered a must-have app. WBD has to convince viewers that its new combined app, while it may not have as much content as Netflix and is also priced at the top of the market, has enough breadth and familiar, beloved content to satisfy everyone in the family.
From an ad sales perspective, the timing isn't ideal for WBD, since advertisers will have committed a lot of their annual TV ad spending by the time the app launches. WBD also has more competition for streaming ad dollars, with Disney+ and Netflix having recently introduced new ad-supported tiers.
Integrating the two apps has been a tall task in its own right. Each has its own tech platform and sensibility, and getting the user experience wrong could risk losing subscribers.
Presenting the entire WBD content catalog on the combined streamer without diluting HBO's prestige factor was another challenge.
Dropping HBO in the app's name means WBD will have to do more to promote the HBO content, Lightshed Partners wrote in a research note. "It is very hard to build a brand from a standing start, let alone ones with the brand equity that HBO and to a lesser extent Discovery enjoy today," the firm wrote.
Data shared with Insider by Antenna, a subscription measurement firm, showed there's relatively little overlap across the two apps, with only 7% of HBO Max and Discovery+ subscribers having both services as of February. Antenna noted that the overlap only accounts for users who signed up after January 1, 2017, and data is collected at the account level, not household level.
HBO Max has greater recognition with younger consumers, according to a new Samba TV/HarrisX poll, which could help grow awareness for Discovery+. Only 41% of Gen-Z respondents to the poll had heard of Discovery+, which was lower than Tubi, The Roku Channel, Peacock, and other services. Gen Z, meanwhile, was more likely to have heard of HBO Max than the average US adult (65% of Gen Z had, compared to 63% of total respondents).
"Leaning into content that speaks to younger audiences is a big area of possible growth for the Discovery+ service," said Dallas Lawrence, SVP of Samba TV.
On the other hand, there's no guarantee Discovery+ subscribers will step up for the bigger bundle when they may be satisfied with the Discovery+ offering and price of as little as $5 per month. And WBD doesn't want to shut down a service that's already profitable.
So for now, WBD is keeping the Discovery+ app around while it offers users extended trials and other offers to sign up for Max.