An HBO Max and Discovery Plus merger was just announced, and now we know that the Max streaming service is official.
The two services have become one app and service. It's not clear which will 'win' — and become the app the other lives inside of — or if either will. It kind of looks like that happened.
Either way, big changes are in store for the best streaming service (HBO Max). The HBO Max and Discovery Plus combination has been a known topic since March of last year, and recent events have had people fretting about a nightmare scenario where HBO Max dies and becomes an HBO tab inside of Discovery Plus.
That seems less likely, after Warner Bros. Discovery executives basically doubled-down on HBO Max's value in a Q2 2022 Earnings call that had HBO Max branding left, right and center. But, yes, a shakeup is afoot for HBO Max. So, since we've been tracking this since March, we've decided to break it all down for you.
HBO Max and Discovery Plus merger — how much will the new app cost?
Max costs the same $16 that people pay for HBO Max right now.
Things get complicated, because Discovery Plus ($6.99 to $4.99 monthly) members spend much less than HBO Max ($14.99 to $9.99 monthly) members do. For this exact reason, it was noted near the end of the Warner Bros. Discovery Q2 earnings call that they plan to let Discovery Plus members stay 'grandfathered' into their original pricing for a (likely short) window of time at first.
| Header Cell - Column 0 | HBO Max | Discovery Plus |
|---|---|---|
| Monthly ad-free price | $14.99 | $6.99 |
| Monthly ad-supported price | $9.99 | $4.99 |
We think that the new combined service shouldn't go above $19.99 per month (for its ad-free plan), its announced 4K price point — the new highest price for Netflix (maybe limit its ad-supported plan to maybe $12.99 per month?).
Also, we know Q1 numbers suggest the balance leans heavily in HBO Max's favor. Back then, there were reportedly 76.8 million total HBO and HBO Max subscribers worldwide, and 24 million or so Discovery Plus subscribers.
This paints a picture where HBO Max hits the upper limits for what customers are willing to pay for a service. At the same time, this suggests HBO Max is the stronger service — since it can get more subscribers to pay more cash.
Further, this will end in tiers. Not only will the HBO Max and Discovery Plus service have a premium ad-free entry level, but it will also have an ad-supported plan (which WBD's Q2 Earnings presentation referred to as "ad-lite" as well.
There will also be a free third tier, which was referred to with an acronym many have never heard of before: FAST, which stands for "Free Ad-Supported Streaming Television." That tier, which is seemingly coming later, is meant to get people in the door and interested in the product. Peacock does this with its free tier. Oh, and there will be another tier that has sports content.
HBO Max and Discovery Plus merger date
A CNBC report, though, said the launch has been pushed up to Spring 2023.
And that's been confirmed: Max is coming May 23rd.
Latin America will get the new service in the subsequent fall, European markets will get it in early 2024, Asian-Pacific markets in the middle of next year, and then new markets will be served that fall.
Why the HBO Max and Discovery Plus merger is happening
The executives at Warner Bros. Discovery see their future as best met with one single streaming service. This news first broke when a comment was made by Discovery CFO (now Warner Bros. Discovery CEO) Gunnar Wiedenfels at the Deutsche Bank 30th Annual Media, Internet & Telecom Conference, where he said “One of the most important items here is that we believe in a combined product as opposed to a bundle… We believe that the breadth and depth of this content offering is going to be a phenomenal consumer value proposition."
This was reiterated on the WBD Q2 earnings call, as CEO and president David Zaslav stated that one of their three strategic priorities is to operate as one combined company and to be the premiere entertainment company globally.
Outlook: HBO Max and Discovery Plus merger concerns
The biggest concern customers probably have is being forced to pay more for content they don't care about. Some people exist in the Venn diagram that shows interest in HBO Max and Discovery Plus, but that's just a small fraction of the folks, as explained above.
Those paying closer attention will be wondering how shows and movies could suffer in David Zaslav's era. Things aren't starting off well for creatives. The Batgirl and Scoob! sequels were canned, and six Max Original films have disappeared as well. Plus, new movies are no longer guaranteed to come out on HBO Max 45 days after their theatrical release.
On the Warner Bros. Discovery Q2 earnings call CFO Gunnar Wiedenfels basically declared it has intent to cut down on kids and animation content "without an adequate investment case against them." In other words, animated content that won't be huge will not be developed.
All along the way, WBD has been swinging the cancelation axe on a lot of scripted programming, including TNT's Snowpiercer, TBS' The Last O.G. and HBO Max's Made For Love.
So, with scripted content on the outs at TNT, TBS and truTV (the Turner networks, or T-nets), eyes turn to how HBO Max content will survive. A report from The Wrap was especially dire, but seemingly unconfirmed as of yet. James Gunn, showrunner of The Suicide Squad-spinoff Peacemaker has said Peacemaker season 2 is safe.
Casey Bloys, HBO and HBO Max's chief content officer, has publicly said The Flight Attendant season 3 is definitely possible — and that it's on that show's producers to decide if they want to come back. The same, he said, is true for a potential season 3 of The White Lotus. We're hoping The Rehearsal (still waiting on a second season pickup) Harley Quinn (currently waiting for a season 4 renewal), Our Flag Means Death (picked up for season 2) and Hacks (picked up for season 3) are among the shows that survive.
As long as the right shows stick around, and the price doesn't go up too much, everything else would be tolerable. But, as noted above, Discovery Plus may stick around, which would irritate HBO Max users forced to sign up for the new service.
