HBO Max and Discovery Plus will be merged into a single app, and it is not surprising since the two companies are joining.
Two of the biggest names in streaming, Discovery and WarnerMedia, are merging, affecting the companies’ apps. As reported by Variety, the CFO of Discovery, Gunnar Wiedenfels, confirmed the merging of the apps today.
The new entity will be known as Warner Bros. Discovery when the merger is completed next week, and they are going the route of combining the apps instead of offering them as a bundle.
Wiedenfels, who will continue as CFO, spoke as the first time the two companies would reveal their post-merger plans at the Deutsche Bank 30th Annual Media, Internet & Telecom Conference.
However, the two platforms will initially come as a bundle before the new company figures out the best way to merge them, which might be why rumors of separate platforms have been swirling.
Quoting Wiedenfels, “One of the most important items here is that we believe in a combined product as opposed to a bundle… We believe that the breadth and depth of this content offering is going to be a phenomenal consumer value proposition. The question is, in order to get to that point and do it in a way that’s actually a great user experience for our subscribers, that’s going to take some time. Again, that’s nothing that’s going to happen in weeks — hopefully not in years, but in several months — and we will start working on an interim solution in the meantime. So right out of the gate, we’re working on getting the bundling approach ready, maybe a single sign-on, maybe ingesting content into the other product, etc., so that we can start to get some benefits early on. But the main thrust is going to be harmonizing the technology platform. Building one very, very strong combined direct-to-consumer product and platform, that’s going to take a while.”
The two platforms have different prices for their plans. Discovery Plus costs $4.99 monthly with ads and $6.99 without. The majority of Discovery’s 22 million subscribers are on this plan. HBO Max and HBO have a larger platform with almost 74 million global subscribers. Its lowest tier costs $9.99 per month and $14.99 sans advert.
Wiedenfels did not mention how much subscribers would pay after the merger, although he confirmed that there would still be ad-supported and ad-free tiers.
“The direct-to-consumer business is obviously further along now than what we had four years ago,” Wiedenfels said. “There’s a greater risk, you want to get that right. Between the two direct-to-consumer products, by the time we close, close to 100 million people are going to be affected as we make those changes. So that will need some very, very detailed and disciplined planning.”
Per Wiedenfels, the $43 billion merger will be finalized early in the next quarter. He expects the new entity will reach a bigger audience. “We have HBO Max, with a more premium, male-skewing positioning, and then you’ve got the female-positioning on the Discovery side. You’ve got the daily engagement that people enjoy with Discovery content versus sort of the event-driven nature of the HBO Max content. Take that together, I have no doubt that we will be creating one of the most complete, sort of four quadrant, old-young-male-female products out there. And I’m really excited about it. I can’t wait to see the first combined direct-to-consumer metrics because, in theory, the acquisition power of HBO Max, combined with the retention power of the Discovery content I think is going to make for a blowout DTC product, and that should certainly drive very healthy revenue growth for years to come.”