- Discovery+ had 22m subscribers by end of 2021, while HBO has 78.3m across its platforms
- Merger expected to be completed in early Q2
The US$43 billion merger between US media giants Discovery and WarnerMedia will see the Discovery+ and HBO Max streaming platforms merged into one offering.
Gunnar Wiedenfels, who will move from his role at Discovery to become chief financial officer of the new combined media entity, told the Deutsche Bank Media, Internet & Telecom Conference that WarnerMedia and Discovery will roll the existing platforms into a “blowout DTC [direct-to-consumer] product”.
According to the most recently-available numbers, Discovery+ has 22 million global subscribers, while HBO finished 2021 with a combined 78.3 million global paying customers across its various offerings.
Wiedenfels confirmed that there would be an initial bundling process with the HBO Max and Discovery+ streaming platforms but, ultimately, the two companies’ existing market strengths would see the services combined.
“We will start working on an interim solution in the meantime. So right out of the gate, we’re working on getting the bundling approach ready, maybe a single sign-on,” said Wiedenfels.
“The main thrust is going to be harmonising the technology platforms, building one very strong, combined, direct-to-consumer product and platform, and that’s going to take a while.”
In the UK, where Sky and WarnerMedia’s existing content licensing deal will keep HBO content off the new combined platform until 2025, Wiedenfels said the BT Sport joint venture with Discovery will make live sports a significant part of the expanded service.
In addition to BT Sport’s domestic Premier League matches, Discovery will likely add live Uefa Champions League from the UK telecommunication giant’s rights portfolio to the combined streaming platform to bolster a sports offering that includes broad coverage of the Olympics and elite professional cycling.
“This BT Sport joint venture is a great example because it really creates an opportunity for upsides, getting us access to important Champions League rights in the UK and will create significant upside opportunity for a combined sports and Discovery+ package at a time when HBO Max is still encumbered by long-term licensing deals,” he said.
In Europe, depending on the territory, Discovery also has significant contracts in elite golf, winter sport and motorsport which can now be supplemented with HBO Max content.
In the US, AT&T-owned WarnerMedia recently signed an eight-year rights deal with US Soccer that will bring national team games to HBO Max, and executives have raised the possibility of putting live National Basketball Association (NBA) on the streaming platform in the future. Turner Sports, a WarnerMedia subsidiary, also has domestic rights to National Collegiate Athletic Association (NCAA) basketball’s March Madness and the National Hockey League (NHL).
In Brazil and Mexico, HBO Max is the new home to European soccer’s Uefa Champions League until 2024, with Discovery’s global, non-US golf rights contracts including South America.
No details on pricing for the combined platform have been shared at this stage. Currently Discovery+ is priced at US$4.99 per month for its ad-supported service, while the ad-free platform is US$6.99 per month. HBO Max’s advertising-based video on demand (AVOD) product is US$9.99 per month and its subscription-based video on demand (SVOD) service is US$14.99.
Having already gained approval from both the US and EU competition bodies, Discovery’s shareholders voted to approve the merger deal on 11th March, meaning the final hurdle for the deal has been cleared. The agreement is set to close in early Q2, with Variety reporting it expects this to be done by 28th April.
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