Warner Bros CEO confirmed plans that HBO Max and Discovery+ will combine into one streaming platform ahead of job cuts to save $3billion
- Warner Bros. Discovery CEO David Zaslav confirmed the merger of the HBO Max and Discovery+ services into one streaming platform next summer
- The unnamed service will also launch in Latin America, Europe and other markets as it hopes to get 130 million subscribers by 2025
- While announcing the merger, Zaslav failed to mention how the company was going to find $3 billion in savings, as layoffs are expected
- On Wednesday Warner Bros. Discovery revealed the $90 million superhero film Batgirl had been axed by the studio and will not be released in any format
Warner Bros. Discovery has confirmed it will merge its HBO Max and Discovery+ services into one streaming platform next year.
During a quarterly earnings call on Thursday, CEO David Zaslav said the combined services will be launched next summer, with a release planned for Latin America, Europe and other markets through 2024 as the company hopes to reach 130 million subscribers by 2025.
The new Subscription Video on Demand (SVOD) service will include the full libraries of both streaming platforms and have ad free, ad-lite and a free-with-ads versions.
'With respect to streaming, our main priority right now is launching an integrated SVOD service,' Zaslav said during the call.
'Once our SVOD service is firmly established in the market, we see real potential and are exploring the opportunity for a fast or free ad-supported streaming offering that would give consumers who do not want to pay a subscription fee access to great library content, while at the same time serving as an entry point to our premium service.'
But as he touted the new services, which does not have a name yet, Zaslav remained quiet about the company's plan to find $3 billion savings that will result in layoffs.
Warner Bros. Discovery CEO David Zaslav, pictured, confirmed the merge of the HBO Max and Discovery+ services into one streaming platform next summer
HBO Max, which has 73.8 million subscribers, will see it's library merge with Discovery+
Warner Bros. executives did not say what the new streaming service would be named, but the new platform will have ad free, ad-lite and a free-with-ads versions
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.
The merger 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.
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 redundancies are said to be the prime source for the coming layoffs, something Zaslav and other company executives have had practice with before when they shut down the long-shot CNN+ streaming service a day into its launch.
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
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.
Warner Bros. Discovery's stock fell by more than 31 percent from its initial price in April
In that same period, Netflix saw huge losses as the stock fell by 36 percent. Over the last six months, the stock is down more than 42 percent
Paramount, which operates its own streaming service, saw its stock drop by 30 percent since April. It's stock is currently down more than 15 percent since February
This year, Warner Bros. has returned to exclusive theatrical windows for at least 45 days before sending movies to HBO Max.
Zaslav said the company would shift its focus on attracting top-tier storytellers for its TV and film projects and commit to theatrical releases, where more money can be made.
'That's why most people got in this business — to be on the big screen when the lights went out,' Mr. Zaslav said. 'That is the magic, and the economic model is much stronger.'
The change comes as streaming services have seen lackluster performances in Wall Street, with Warner Bros. Discovery's stock down more than 31 percent from its initial price of $25.50 in April.
Within that same time, Netflix saw its stock plummet by about 36 percent, with Paramount's stock also seeing a drop of about 30 percent.