Warner Bros. Discovery to Keep Discovery+, in Strategy Shift
Decision reflects concerns that some Discovery+ subscribers might not want to move to pricier platform
By Jessica Toonkel and Joe Flint
The Wall Street Journal
Feb. 8, 2023 7:33 am ET
Warner Bros. Discovery Inc. WBD -5.02%decrease; red down pointing triangle plans to keep Discovery+ as a stand-alone streaming service, people familiar with the matter said, a strategy shift for a company that had planned to consolidate content in a single subscription app.
The move comes as Warner Discovery is close to launching a new, yet-to-be named supersize streaming service amid increased competition and in an uncertain economic environment.
The idea of building a one-stop shop for streaming was part of the appeal of merging AT&T Inc.’s WarnerMedia with Discovery Inc., the deal that created Warner Bros. Discovery last year. The company had said streamlining its offerings made sense for the company and for consumers, given how crowded the streaming marketplace has become.
Instead of combining HBO Max and Discovery+ in their entirety, the new platform will feature HBO Max content and most Discovery+ content, with Discovery+ remaining available as a stand-alone option, some of the people said.
The decision to keep Discovery+ is part of an effort to avoid risking losing a significant chunk of the app’s 20 million subscribers who might not want to pay the higher price to access that content, according to the people familiar with the matter.
The content that will be available on both Discovery+ and the new service includes Discovery Channel’s “Shark Week” and programs from Chip and Joanna Gaines’s “Magnolia Network,” into the new service that expands on what HBO Max has built, some of the people said.
Discovery+ without ads costs $6.99 a month and the ad-supported version costs $4.99. HBO Max, meanwhile, costs $15.99 a month without ads and $9.99 with ads. The coming streaming service will likely become more expensive than HBO Max, company executives have said. Discovery+ is profitable and has low operating costs, some of the people said.
Warner Bros. Discovery has said that it is looking to make sure it offers an array of streaming options for viewers at different price points.
To that end, the company is also planning to launch a free ad-supported streaming service this year in an effort to reach a broader audience as the competition for users intensifies. The coming free service will include a variety of streaming channels of programming including library content from the Warner Bros. studio, as well as shows that originally ran on HBO and Discovery outlets, said the people familiar with the situation.
Write to Jessica Toonkel at jessica.toonkel@wsj.com and Joe Flint at Joe.Flint@wsj.com
Appeared in the February 9, 2023, print edition as 'Discovery+, HBO Max Won’t Merge After All'.
Warner Bros. Discovery to Keep Discovery+, in Strategy Shift - WSJ |
