Warner Bros. Discovery Details New Streaming Plans: U.S. Launch of Combined Service in Summer 2023, Free AVOD Service to Follow

Warner Bros. Discovery executives outlined the company’s plans in streaming Thursday, revealing that the new global service will launch in the U.S. in summer 2023, with other markets to follow.

CEO David Zaslav also said that, after its new service gains a foothold, the company also plans to launch a free, ad-supported streaming service with some of its content, part of a “diversified approach” to streaming.

“Our streaming strategy has evolved over the last year, and reflects the importance of, rather than the dependence on [streaming],” Zaslav said on the company’s earnings call, adding that the company will roll out its free or “FAST” service, “once our SVOD service is firmly established in the market.”

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The streaming service is targeting profitability in the U.S. by 2024, and 130 million subscribers by 2025, up from 92 million as of today.

For now, however, streaming is still a money-loser, with the company reporting a $1.5 billion loss in the quarter for its streaming division.

Wall Street and the entertainment world writ large have been wondering about the company’s plans, given that it owns and operates 2 major streaming services, HBO Max, and Discovery+. The company had been telegraphing for some time that it planned to ultimately go to market with one major streaming service.

JB Perrette, who leads the company’s streaming business, dove into more detail on the plans.

For starters, there will be one service, under one brand, name still to be determined. The U.S. launch will be summer 2023, with Latin America to follow later that year, and Europe and other markets following in 2024.

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The service will feature the full “unique and complementary” content libraries of both services, but will use the tech stack of Discovery+, which Perrette said received more positive feedback from users than HBO Max’s interface.

He added that the combined service will launch with a “big, noisy” marketing campaign meant to highlight the enormous library of content.

As for the free service, Perrette noted that the company currently licenses much of its content to free AVOD services, but will reevaluate those deals.

“There is much work to be done over coming months,” Perrette said. “We are determined to get it right, which will take a bit of time.”

Earlier on Thursday, WBD revealed that programming from Magnolia Network would join HBO Max, while some CNN original programming would join Discovery+. That announcement teed up the fact that no merger between the services was imminent.

Perrette said that other content may shift between services ahead of the launch of the combined service.

Ultimately, the combined content will be the differentiated content.

“In an already crowded market, consumers know these brands, and they trust them to deliver quality,” Perrette said, adding that “looking ahead, we will continue to have healthy content investment,” albeit at a “more measured pace” than prior plans.

To that end, Zaslav said that the team “could not find” an economic model that supports expensive direct-to-consumer movies like Batgirl, which the company killed after principal photography was completed.

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