The rumors are true: Discovery+ will stay a standalone service forward of the upcoming consolidation of the smaller streamer and HBO Max.
“For those who have Discovery proper now, the churn may be very low, and it’s worthwhile,” Warner Bros. Discovery CEO David Zaslav stated through the firm’s fourth-quarter earnings name Thursday night.
Whereas Zaslav acknowledged that many purchasers would wish to transfer as much as the bigger product, which might have content material from each streamers, some subscribers are happy paying $5 to $7 and sticking with Discovery and OWN-type content material.
“Our technique isn’t any sub left behind. We have now worthwhile subscribers which might be very pleased with the product providing of Discovery+. Why would we shut that off?” Zaslav added.
Although Discovery+ could also be worthwhile, Warner Bros. Discovery’s streaming division definitely will not be, this time shedding $217 million within the fourth quarter. The direct-to-consumer section pulled in $2.45 billion in income; solely round 5% got here from promoting.
Total, the corporate misplaced $2.1 billion, which Zaslav attributed to a “very difficult” macroeconomic surroundings, which he believes will enhance within the second half of the yr.
The DTC section added 1.1 million subscribers, bringing its whole to 96.1 million to finish the yr, up from the 94.9 million reported within the earlier quarter.
There’s nonetheless no info on a launch date for the upcoming mixed service; nonetheless, the corporate revealed there can be a press occasion on April 12, which Zaslav teased would reveal a “considerably enhanced” product platform.
One ring to rule all of them
Regardless of the continuing income losses, Zaslav stays assured that WBD is heading in the right direction.
Throughout the name, he revealed that “a number of” new Lord of the Rings films have been ordered by the corporate’s movie studio.
Newly put in studio leaders Mike De Luca and Pam Abdy—who lately exited from MGM—have signed on with the corporate to create the movies. A “new period” at DC Studios can also be ushering within the improvement of 5 movies and 5 tv collection.
As a part of WBD’s content material technique, Zaslav pointed to the success of HBO originals, together with Home of the Dragon, The White Lotus, Euphoria and up to date hit The Final of Us, as subscription drivers.
The Final of Us premiered through the first quarter of this yr, and Zaslav was fast to emphasise its exponential development, utilizing the chance to double down on the weekly launch mannequin.
“We consider that when you may have content material that’s so good that it hits the zeitgeist, the easiest way to drive curiosity and engagement will not be by dropping the whole season on a platform however by permitting the thrill and anticipation to construct over time,” Zaslav stated. “And it’s the identical precept with theatrical: Perceived worth of content material will increase when there’s nice expectancy and pleasure.”
A struggling technique
By Zaslav’s admission, closing the Warner Bros. Discovery merger instantly earlier than final yr’s upfront could not have been the most effective technique.
“We needed to take two completely different gross sales groups and pull them collectively,” he stated, including that the group made the choice to drive worth relatively than further quantity.
“To be able to try this, we took much less quantity than we may have. And now you see a really mushy scatter market, so that’s having some impression on us versus others that took a a lot greater place,” Zaslav stated.
Looking forward to the 2023 upfront, the corporate is in search of a extra equal stability.
“I feel the breadth of our content material, along with the place we go in on worth, positions simply very effectively,” Zaslav stated. “And so we’ll take into account this stability of quantity versus worth, however I at all times would err towards worth as a result of I feel that’s the place you actually construct asset worth.”