The merger of HBO Max and Discovery + will result in a price increase

Last August, HBO Max and Discovery + announced the future merger of the platforms into a new streaming service that will bring together both catalogs, with a launch forecast in the United States for 2023 and in Europe for 2024. In the presentation of the company’s quarterly results on November 3, JB Perrette, CEO of Streaming and Games at Warner Bros. Discovery, commented on some of the news that this union will bring and anticipated a more than likely increase in rates.

Perrette said he is sure the prices will go up “to the north” and that the company sees this increase as “an opportunity, especially in this environment”, referring to the inflation of the world economy. Of course, he also pointed out that by combining both catalogs and doubling the offer, even if rates rise, they will still do so “The best value for money”.

Announcements, the future

Another of the strategies that the company will follow to increase its income is to increase advertising. In June 2021, an ad-supported HBO Max option launched in the US for just $ 10, and Perrette is surprised it hasn’t been more successful: “Frankly, we were a little surprised by HBO Max’s ad-supported offering that more people didn’t switch to this option. I think it says two good things for us. First, we think we can actually get more out of the ad-free version, so we can raise the prices. “and continued to talk about the rise in ads, “Today we have two to three minutes of ads on ad-supported HBO Max, about half of what we have on Discovery +, so when we launch the combined service, we have nearly 100% growth in the new catalog available.” let’s mix ads for these two products.

While the company reflects on how much it can increase amounts and how much extra ad space it can sell, Perrete also pointed out that internationally the average revenue per user was significantly lower than in the US, but they see it as another. “Market Opportunity”. The earnings report for this period was rather poor, with total revenues 11% lower than the same quarter of the previous year, of approximately 9,800 million dollars, with net losses of 2,800 million. Between Discovery + and HBO Max, the company reports 94.9 million direct subscriptions, but doesn’t split them individually. Regarding these figures, David Zaslav, CEO of the entire company, said yes “much more work to do” Y “some hard decisions to make”. Yes, the figures are expected to be better in the third quarter, where the premiere of “The House of the Dragon” kicks in.