HBO Max might get maimed
Source: https://www.theverge.com/2022/8/4/23291037/hbo-max-warner-bros-discovery-merger-david-zaslav-chip-joanna-gaines

It should not surprise you that HBO Max is about to be in a world of hurt. It is larger and more successful than its current sister streamer, Discovery Plus. But it’s also a part of Warner Bros. Discovery, a company now helmed by David Zaslav, and Zaslav is a man who loves him some reality TV and is okay gutting channels, canceling cool shows, and axing movies if it means the accounting books will look a little prettier. Now, just days after his company canceled Batgirl for a tax write-off, rumors are flying that HBO Max is going to be gutted, too.

By most recent estimates, HBO Max, despite a terrifically bad app, had over 76.8 million global subscribers. Discovery Plus, the service launched by Zaslav pre-merger, had about 22 million. It’s firmly the third-largest streaming service by subscribers, behind Netflix and Disney Plus. HBO Max, again despite just a terrible app that needs a total overhaul, felt like proof that you didn’t need huge Marvel- and Star War-grade franchises or Netflix’s luxury of being an early mover in the streaming space to build a fairly robust streaming business. Jason Kilar, then-CEO of WarnerMedia, instead took a lot of things the company already had (the stellar HBO and its many successful properties; a huge catalog of WB films and TV shows; and a big fancy bag of successful intellectual property like DC Comics and Harry Potter) and formed HBO Max.

To better differentiate HBO Max from Disney Plus and Netflix, Kilar also risked upsetting Hollywood by providing some particularly important incentives for customers stuck at home due to the pandemic. HBO Max had day and date releases for theatrical films.

Zaslav was supposedly not a fan of Kilar’s strategy. Never mind his company was merging with Warner Bros. and coming in with a much less popular streaming service full of the stuff you watch when doing laundry or you’re stuck at your parents’ place for the weekend. Never mind the broader strategy of streamers is to produce “appointment TV” to compete with YouTube, TikTok, and Twitch. Zaslav is a reality TV guy. He built Discovery up into a reality TV empire and has long preferred the fast, cheap, and easy reality show to that more critically acclaimed but pricey scripted TV.

Earlier this year, he hinted at the doom coming for the fledging HBO Max. “Our goal is to compete with the leading streaming services, not to win the spending war,” he said on a call in February. On the same call, CFO Gunnar Wiedenfels said the new company would seek “content efficiencies.”

The Wrap and folks on Twitter claim that Warner Bros. Discovery may announce a major restructuring today during the company’s Q2 earnings call. The HBO Max side of the business will apparently face the brunt of it, with 70 percent of their development staff being laid off — according to an anonymous source The Wrap spoke to.

The idea is that HBO will continue to be a marquee product for Warner Bros. Discovery but HBO Max, the streaming service that hosts the library of HBO and Warner Bros. and a surprisingly sturdy stable of original programming, will disappear, merging into a new app that will host all of the current content for both HBO Max and Discovery Plus (with the obvious exception of Batgirl).

We’ve known the two apps would be combined since March, when Wiedenfels confirmed it at the Deutsche Bank 30th Annual Media, Internet & Telecom Conference. At the time, he called for “some very, very detailed and disciplined planning” to transition customers and merge to two services.

If the rumors are true about today, either plans have changed or someone didn’t get the memo. Instead of a thoughtful rollout, the last few days have been chaos for the company. The cancellation of Batgirl has sent shockwaves throughout the entertainment world. The next day, HBO Max quietly pulled a number of HBO Max-exclusive films from the service and canceled others in production, further raising fears. (Fortunately, the pulled films are still available. Instead of being stuck in the vault with Batgirl, they’re now merely available on demand for sale or rent.)

This morning, HBO Max announced Discovery darlings Chip and Joanna Gaines would be bringing select content from their Magnolia Network to the streaming service. “We can’t wait to bring these stories we love—including our next adventure, Fixer Upper: The Castle—to HBO Max this September,” said a statement from the couple in an HBO Max press release. Things are suddenly moving very fast at Warner Bros. Discovery, and the shiplap is on the wall.

What that means for the many current HBO Max originals remains to be seen. Shows like Hacks, Harley Quinn, and Our Flag Means Death have earned big accolades and vocal fandoms. Other shows have died on the vine — the Ridley Scott sci-fi show Raised by Wolves was just canceled after two mediocre seasons. Later today, Zaslav could repeat what his company did at The CW and commence with a second “Red Wedding,” going on a canceling spree to further chip away at the $55 billion debt the company incurred in the merger.

That debt is a sword hanging over the company’s head. And HBO Max, the pricey streamer trying to compete with Disney and Netflix, may be used as a shield to protect the still lucrative linear cable business at the heart of Warner Bros. Discovery.



Source: https://www.theverge.com/2022/8/4/23291037/hbo-max-warner-bros-discovery-merger-david-zaslav-chip-joanna-gaines

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