What will be the impact of the combined HBO Max-Discovery service? Analysts and senators are lining up on different sides of the debate, but anything less than a surge in service sign-ups will be considered a failure.
April 12th press event should provide more details
All eyes will be turned toward the WB Discovery streaming product press event on Wednesday, April 12th, where the company is expected to unveil more details about the relaunch of HBO Max. Various reports and rumors have already given us some details:
Hopefully, Wednesday’s event will clarify what Max will be when released. Also, expect to hear more details about the FAST service the company plans to launch later this year. Presumably, the FAST service will include HBO shows recently removed from HBO Max and licensed to third-party FAST platforms, including Westworld, The Nevers, and Raised by Wolves.
One investor is excited!
Analyst firm Truist added coverage of WB Discovery and thinks the relaunch will drive a 25% increase in the company’s stock. Analyst Matthew Thornton told investors in a note:
“We expect renewed momentum in subscribers and ARPU with optionality around premium and [free ad-supported streaming TV] FAST tiers.”
He also cited internal survey data showing HBO Max is the fourth most popular SVOD platform. Recent data from PCH Consumer Insights tells a slightly different story. Its 10,531 18-54-year-old US adults survey shows HBO Max as the fifth-most popular service, well behind the big four: Netflix, Prime Video, Hulu, and Disney+.
Mr. Thornton also pointed to DC Universe as a major asset of the service. WB Discovery has a long list of DC movies in the works. However, with the company souring on direct-to-consumer movie releases, it’s unclear when or if the movies will come to the MAX. The Batgirl debacle also places a question mark over the company’s commitment to the franchise.
Congress unimpressed with the merged WB Discovery direction
A group of four Democratic senators is singularly unimpressed with how David Zaslav, WB Discovery CEO, and his team are managing the merged Discovery-Warner Media company. Sen. Elizabeth Warren (D-Mass.); Rep. David Cicilline (D-R.I.), Rep. Pramila Jayapal (D-Wash.), and Rep. Joaquin Castro (D-Texas) sent a letter to the Justice Department recommending a post-merger review of the company. They aren’t seeking to unwind the merger. Rather, they want the Justice Department to learn from the behavior of the company post-merger.
The group sees a negative effect on jobs with the cancellation of already approved projects like Batgirl, CNN+, and The Time Traveler’s Wife. The senators are also concerned about the confusion and reduction in the choice that the combined product MAX may cause and the impact on Warner Bros. Studios:
“WBD’s new ownership is hollowing out an iconic American studio.”
The extent to which a possible Justice Department review of the merger could harm WB Discovery and the launch of MAX is unclear. However, it doesn’t help with the perception of the company and relaunched product by the industry and financial community. That said, the success of MAX will be judged solely by its positive impact on service subscribers, and anything less than the big surge expected by Truist will be considered a failure.
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