Seriously, What's Going On With HBO Max?
HBO Max is getting a radical makeover—one that will be closely watched from Hollywood to Wall Street. On Thursday, HBO Max and its new sibling Discovery+ announced that they will re-launch as a single streaming service in summer 2023. Streamers, investors and staffers were all anxiously waiting for details of the much-rumored changes in the first quarterly earnings report from the newly formed Warner Bros. Discovery, now the parent of HBO Max. The company announced that it lost $3.4 billion in its first-ever quarter post-merger and outlined the plan for its overhaul of its streaming strategy.
Warner Bros. Discovery was created in April by the merger of Discovery, owner of HGTV and the Food Network, with WarnerMedia, which was spun off from telecommunications giant AT&T. The merger gave the combined company ownership of a robust portfolio of major television networks like the CNN, Food Network, Cartoon Network and Turner Classic Movies. It also received ownership of more of Warner Bros.'s intellectual property which includes everything in the DC Extended Universe.
Days after the merger became official, Warner Bros. Discovery CEO David Zaslav made huge headlines by canceling CNN+ less than a month after its launch—flushing away a massive $100 million investment by Warner that had flopped on arrival.
HBO Max has been a stronger performer in the streaming wars. In the first quarter of 2022, it added three million subscribers globally vs. Netflix’s decline of one million subscribers over the same period.
And yet, change is coming.
So What's the Drama?
Well, earlier this week news came out that Warner Bros. would be shelving a lot of their content. The highly anticipated Batgirl movie, with its $90 million budget, was no longer going to be released. It was supposed to debut on HBO Max later this year. This came as a shock to Batman fans as Michael Keaton was supposed to reprise his role as the DC superhero for the first time in more than 30 years. Warner is also expected to shelve the “Scoob!” sequel.
Variety reported that the reason Warner Bros. pulled the plug on Batgirl being released on HBO Max was all to do with money—specifically, the opportunity for a tax write-off. The controversial decision was a prelude to the post-merger streamlining that the company outlined on Thursday. Warner Bros. Discovery told Wall Street that it plans to find some $3 billion in cost savings.
Before the company’s earnings call, The Wrap reported the changes “will result in a gutting of HBO Max, significant layoffs for its executives and staff to minimize redundancies with HBO, and a combined streaming service with Discovery+ with a harder line separation between the scripted and unscripted content operations.”
Warner Bros. has not yet announced what the name for the combined streaming service will be or the prices.
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