Yet, a small panic has recent set in about HBO Max’s fate. It all started with the Warner Bros. Discovery merger, which led to the news that HBO Max and Discovery Plus were to be combined into a mega-service. And, no offense to Discovery Plus subscribers, the mere mention of a rumor that Discovery Plus would eat up HBO Max sent the Streaming room in the Tom’s Guide Slack into a shouting match about how preposterous that was. And, then, the Warner Bros. Discovery Q2 earnings call came and went without any confirmation of any plans — including those raised by YouTuber Grace Randolph (opens in new tab), who put a rumor online claiming HBO Max would become an HBO tab inside of Discovery’s new app. That said, the rumors of chaotic layoffs at WBD won’t die down. Following The Wrap (opens in new tab)’s report that 70% of the HBO Max development staff would be cut, Matthew Belloni of Puck (opens in new tab) reported that “several sources” state small groups of layoffs will occur until Labor Day (Sept. 5), and that there. will be “a ramp-up in bloodletting in September and October.” Basically, expect proverbial Red Weddings while House of the Dragon airs. This all leaves me with some concerns. Despite the fact that the HBO Max brand had a prominent place throughout the slide deck presented on the Warner Bros. Discovery earnings call, we don’t know much about the eventual merged service. So, I thought now is a good time to lay out the case for HBO Max being the streaming service that survives 2023 (the new service debuts in the U.S. next summer) — or at least for why it should stay intact.
HBO Max should eat up Discovery Plus because it’s already winning
Streaming service subscriber numbers are rarely clearly broken down, but we do know enough about how both have been doing to give reason for HBO Max to take over Discovery Plus. In Q1 of 2022, Discovery had acquired a total of 24 million streaming subscribers (opens in new tab). That’s about a third of the 76.8 million total HBO and HBO Max subscribers announced for the same quarter (opens in new tab). At the WBD earnings call, JB Perrette, President & CEO of Discovery Streaming & International, said about 4 million subscribers overlap between the two offerings. There’s some discrepancy with the numbers at hand, though, as the earnings call also revealed (opens in new tab) a current total subscriber count — across both HBO Max, HBO and Discovery Plus of 92.1 million, up from 90.4 million from the previous quarter. All that said, you can look at those above numbers and see that HBO and HBO Max are more deeply entrenched. Risking that branding by changing it to something else could confuse and alienate subscribers, especially if they think something is being taken away from them (WBD did kill off the HBO Max Batgirl movie and also remove six Max Originals films). But raw subscriber numbers are only half of the story here. HBO and HBO Max is much more expensive ($14.99 per month without ads, $9.99 with them) than Discovery Plus ($6.99 without ads, $4.99 with them). That means HBO and HBO Max aren’t just better at pulling in more subscribers, they’re better at getting people to part with more money.
A Discovery Plus section makes more sense than an HBO Max section
Merging HBO Max and Discovery Plus is far from simple. Both are complex streaming services in their own right. But from where we sit, Discovery’s content looks more easily organized. Looking up and down the service, it may have content from a variety of linear channels (TLC, Discovery, SCIENCE, Food Network, ID, A&E, HGTV and the Magnolia Network), but its offerings can be broken down into two major categories: unscripted reality TV and documentary films. Meanwhile, HBO Max has a much denser library. You’ve got comedy specials (as well as comedic series and films), news programming, fantasy and sci-fi, its own documentaries, a plethora of animation (the aforementioned Studio Ghibli is joined by Cartoon Network, Looney Tunes and Adult Swim) and much more. Fitting Discovery Plus’ content inside of HBO Max makes a whole lot more sense. It has Documentaries and Reality sections already, plus, you can just add all the ‘channels’ from Discovery Plus to the HBO Max list of hubs (HBO, DC, Max Originals, Turner Classic Movies).
Why people are concerned Discovery will win, or HBO Max may still hurt
Look back to the Discovery & WarnerMedia merger. Discovery was the side that bought WarnerMedia. They’re the ones proverbially in charge, including CEO David Zaslav, who joined Discovery in 2006. While Discovery may want to make the most of its purchase and make sure it retains its value, it could also decide to break that service down for parts. This, arguably, is the lens through which those concerned about HBO Max see everything. Because as much prominence as the HBO Max logo had in that earnings call slide deck, look at this language from the Zaslav on the earnings call, speaking of Casey Bloys, chief content officer at HBO and HBO Max: “Quality is what matters. Quality is what Casey and that team is delivering. It’s the best team in the business. We’re doubling down on that HBO team. They’re all committed under contract and we’re going to spend dramatically more this year and next year than last year and the year before.” So, if Zaslav’s specificity — saying HBO and not HBO Max — was intentional, there’s reason to think that WBD’s new focus on this new streaming service may cut out some of what we love about HBO Max. Sure, they definitely want to keep the focus on excellent new originals, but will the service coming in summer 2023 offer the same strong back catalogue?
Outlook: HBO Max ‘winning’ is less concerning than a likely price hike
At the end of the day, as much as we want to “keep” HBO Max, there’s a bigger problem at hand. The combined Discovery Plus ($6.99 to $4.99 monthly) and HBO Max ($14.99 to $9.99 monthly) service will very likely cost more. And while I care more about HBO Max than Discovery Plus, I can’t help but think about those Discovery Plus subscribers who don’t pay for HBO Max, as there’s only a slight overlap of 4 million subscribers according to the earnings call. In the Q&A portion of that call, it was noted that there is a plan to allow existing Discovery Plus members to stay ‘grandfathered’ into their original pricing for a window of time. It probably won’t last especially long, though, if I had to guess. So, no matter what service wins, WBD needs to find a price point that pleases enough of its subscribers to stay. That said, if that new service is called HBO Max, I bet there’s a stronger chance many of its existing subscribers stay. Matthew Belloni of Puck (opens in new tab), who I mentioned earlier, said that one potential name being discussed is HBO Discovery. At face-value, that name is a little concerning. If you took out all of the ‘Max’ in HBO Max — the Ghibli’s, the Originals and more — and replaced it with Discovery’s reality TV content, I’d probably be more prone to canceling HBO Max than ever before.
