Warner Bros. Discovery’s latest decision shows company leaning to streaming

Warner Bros. Discovery — Last Wednesday, Warner Bros. Discovery revealed that its upcoming streaming service would be named Max.

The streaming service brings together programs from HBO Max and Discovery+.

Max is set to launch on May 23 in the United States, while the rest of the world will have to wait until 2024.

The streaming race

Warner Bros. Discovery’s decision to make a change to the name HBO Max comes across as a practical marketing choice.

However, a deeper analysis shows the decision shows an existential crisis within the company and the media industry as a whole.

As other streaming services like Netflix and Disney have been leading the charge in the new media, the company is working to stay relevant.

Occasionally, it pushes the message of financial discipline, deprioritizing streaming subscriber additions.

It raises the dilemma of quality against quantity, but Warner Bros. Discovery appears to be trying to retain both.

During a presentation that introduced Max on Wednesday, JB Perrette, the head of streaming, described the service as follows:

“Max is where consumers can finally say, ‘here’s a service that not only has something for everybody in my household, but something great for everybody in my household.’”

Dropping the HBO in the Max

On Wednesday, Perrette explained why Warner Bros. Discovery decided to drop HBO in the company’s new streaming service.

He noted that HBO is typically associated with adult entertainment, saying Max would lean toward programs suitable for children and families.

“We all love HBO,” said Perrette. “It’s a brand that’s been built over five decades to be the edgy, ground-breaking trendsetter for entertainment for adults.”

“But it’s not exactly where parents would most easily drop off their kids.”

“Not surprisingly, the category hasn’t met its true potential on HBO Max.”

Executives felt the HBO name limited the audience for the streaming service as it scared off prospective audiences.

They also felt the HBO brand might be diluted by Discovery’s reality TV programming onboard the platform, most of which would serve as background TV rather than a conversation starter.

Read also: Lamborghini get massive boost with Revuelto demand

“HBO is not TV. HBO is HBO. It needs to stay that way,” Perrette explained.

“We will not push it to the breaking point by forcing it to take on the full breadth of this new content proposition had we kept the name in the service brand.”

“By doing so, we’ll better elevate and showcase our unparalleled array of other content and brands that will be key to broadening the appeal to this enhanced product.”

Warner Bros. Discovery’s explanation is valid as HBO mainly appeals to a certain kind of audience.

HBO fans are unlikely to unsubscribe from the name change, but some people could be lured in by the prospect of the adult brand getting obscured by the un-HBO content.

Streaming evolution

When HBO Max first launched, AT&T and WarnerMedia executives highlighted how the app was home to HBO.

However, the point has become a footnote after 80 million subscribers as those seeking HBO know where to find it.

On most platforms, HBO Max will merely morph into Max.

According to JB Perrette, streaming is still in its teenage years, and Max makes more sense as a name to increase global subscribers in a lower-growth world.

Warner Bros. Discovery said its goal was to maximize the subscribers who sign up for Max.

It was initially the goal for every media company when CEO David Zaslav agreed to merge Discovery with WarnerMedia in 2021.

However, Zaslav revealed it was no longer the priority.

“I’d rather have 100 million subscribers or 150 million subscribers and have it be really profitable than try and stretch for some big number, and in the end, lose money.”

“We take a look at what people watch on Max and we can see exactly what they like and exactly what they don’t,” Zaslav continued.

“And some of the stuff they’re not watching, we can put it on a free AVOD [advertising-supported video on demand] platform, and some of the stuff that they’re not watching, we can keep it non-exclusively on Max, but we could also sell it to others.”

“We are relentlessly focused on creating great content and monetizing in every way possible.”

Warner Bros. Discovery revenues miss the mark in 4th quarter

Warner Bros. DiscoveryNumerous large corporations have released their fourth-quarter revenue reports in recent weeks.

Some have improved, while others have remained the same, and some have suffered major losses.

Warner Bros. Discovery is one of the corporations that reported a huge loss in the fourth quarter.

The news

Warner Bros. Discovery released a statement on Thursday, reporting a large loss of more than $11.1 billion in fourth-quarter sales, falling short of analysts’ expectations.

A lackluster advertising market can be blamed for some of the company’s decline.

Warner Bros. Discovery’s TV networks division shrank by 6% to $5.5 billion, with an emphasis on ad income.

TNT, TBS, and Discovery are among the cable networks affected.

Refinitiv compared the company’s report to analyst estimates:

  • Posted revenue: $11.01 billion, expected revenue: $11.36 billion
  • Posted loss per share: 86 cents, expected loss per share: 21 cents

In addition, Warner Bros. Discovery reported a $2.1 billion loss for the quarter.

The company’s stock dropped after hours as well.


Earlier this summer, Warner Bros. Discovery  Executives warned about a deteriorating advertising market.

Other media firms, such as Paramount Global, saw their earnings suffer as a result.

On the company’s results call on Thursday, Warner Bros. Discovery CFO Gunnar Weidenfalls, fundamental advertising trends slowed in the fourth quarter.

These were exacerbated by the shrinking viewership.

The Warner Bros. Discovery CEO David Zaslav also commented on the current macroeconomic situation, forecasting an improvement in 2023.

“We are assuming things will get better in the second half,” said Zaslav.

The business has been considering restructuring expenditures and impairment charges as a result of the Warner Bros. and Discovery merger in 2022.

At the same time, they were striving to steer its streaming business toward profitability.


Warner Bros. Discovery ended the fourth quarter with a balance sheet debt of $45.5 billion and $3.9 billion in cash on hand.

The company’s priority has been to reduce its debt and slash expenditures.

According to officials on Thursday, the company expects to continue its efforts to reduce a significant percentage of its debt from its balance sheet during the next two years.

The corporation repaid $1 billion in debt during the last quarter and $7 billion since the deal occurred in April.

“With the major restructuring decisions behind us, this year we are focused on building and growing our businesses for the future,” said Zaslav. “And we’re off to a great start.”

Read also: Job cuts and hiring creates headache for US market

The streaming segment

The Warner Bros. Discovery is the parent company of two major streaming platforms: HBO Max and Discovery+.

According to the firm, its worldwide direct-to-consumer streaming user base increased from 1.1 million to 96.1 million at the end of the quarter.

On Thursday, the firm posted a 6% rise in sales.

The rise can be attributable to an increase in subscribers for its ad-supported tiers.

Nevertheless, losses in the streaming market have shrunk.

Warner Bros. Discovery lost $217 million over that time period, a $511 million improvement year over year.


In the spring, Warner Bros. Discovery will debut a bundled streaming service.

The business will have an investor walk-through on April 12.

According to prior rumors, the combined platform would be known as Max.

While there are plans to combine Discovery+ and HBO Max content under a single roof, Zaslav confirmed that the former will have its own streaming service, saying:

“We have profitable subscribers that are very happy with the offering of Discovery+, why would we shut that off?”

Earlier this month, Warner Bros. Discovery revealed that t he price of HBO Max’s ad-free subscription had been raised from $1 to $15.99.

That is the platform’s first price increase since its introduction in May 2020.

In addition, the corporation stated that it intends to invest in additional content and user experience.


With last summer’s indications of a deteriorating advertising market, Warner Bros. Discovery has had an impact on its revenue.

Last week, Paramount Global reported a reduction in quarterly income due to decreasing ad expenditure.

Major athletic events particularly impacted the company’s network TV division.

Several networks broadcast college football and the FIFA World Cup during the fourth quarter.

Due to reduced TV licensing deals and fewer theatrical releases, Warner Bros. Discovery’s income for the studios division fell by 23%.

The fourth quarter of 2022 saw the release of Black Adam.

Meanwhile, several titles were published in 2021 over the same time period, including:

  • Dune
  • King Richard
  • The Many Saints of Newark
  • The Matrix Resurrection

Finally, David Zaslav disclosed that Warner Bros. Discovery has agreed to develop numerous “Lord of the Rings” films, which is one of the company’s most profitable properties.