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.

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“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.”