Discovery Taps Kevin Mayer to Help Steer WarnerMedia Merger

The Discovery and WarnerMedia merger isn’t slated to close until midway through next year, but Discovery CEO David Zaslav—who will head up what will be called Warner Bros. Discovery—is already assembling the team of leaders who will guide his combined company. Among them, Zaslav told investors Wednesday morning, is Kevin Mayer, the former head of streaming at rival Disney who made an ill-fated exit to lead TikTok as CEO before quickly resigning last year. Mayer, who has since served as chairman of DAZN Group and eyed entertainment acquisitions with an SPAC, will serve as a consultant as the company works toward a combination that still requires winning regulatory approval, Zaslav said. “We have brought on an old friend of mine, one of the most talented people in the business,” Zaslav told investors. “He's super excited about getting in the car with us.” Additionally, Discovery chief financial officer Gunnar Wiedenfels will serve as the CFO for the combined company, Zaslav announced Wednesday. Discovery+ Sets Spinoff-Heavy Fall Slate to Build on Subscriber Growth The Mayer and Wiedenfels appointments offer a clearer glimpse at the vision for the combined company, which stands to reshape the media landscape and will deliver a media and streaming behemoth aimed at competing head-to-head with rivals like Netflix and Disney+. Both executives are seasoned in the business, with Mayer laying the early groundwork for Disney+, which has now grown to 116 million subscribers and Widenfels steering Discovery’s Scripps acquisition four years ago. Prioritizing ad-supported streaming Zaslav cautioned that it was “still premature” to provide too many details about the combined company since it is still awaiting regulatory approval, but he offered some notable hints as to his vision for Warner Bros. Discovery. Chief among them, other than combining the content offerings from both companies, is a prioritization of the advertising-supported streaming tier to drive growth, which Zaslav confirmed for the first time. “Our ability to drive revenue and ARPU positions us well for long-term growth, particularly given our plan to market with a lower-priced ad-light service starting off in the U.S. and later in key international markets—a meaningful distinction from some competitors,” Zaslav said. “The opportunity to scale an ad-light offering represents one of the most significant upside drivers of the company long-term while offering a compelling value for more price-sensitive consumers.” Discovery+ continues to report success with its $4.99-a-month ad-light tier of Discovery+, which is delivering the company’s highest average revenue per user offering, Zaslav said. Discovery has prioritized growing the ad-supported tier considering the positive effects on revenue, and that early success has prompted Discovery to focus on advertising at the combined company, Zaslav said. But it marks a departure from HBO Max’s own approach. While that service rolled out its own ad-supported tier earlier this year, an exceptionally ad-light service at less than four minutes of ads per hour, executives have said they are agnostic about what tier consumers prefer. The plans for the combined company will mean an eventual expansion of its Discovery Premiere offering pioneered by Discovery ad sales chief Jon Steinlauf— which allows advertisers to buy a mix of the 30 most-watched shows from across the Discovery portfolio and was a top upfront priority for the company—to also feature WarnerMedia content, including sports and news, Zaslav said. In the U.S., Discovery believes less than half of its Discovery+ subscribers also have HBO Max, which the company will look to leverage when it rolls out a combined product. “With the right packaging, [it] provides a real opportunity to broaden the base of our combined offering,” Zaslav said. That chunk of Discovery+ subscribers is growing larger. In the quarter, Discovery counted 20 million total direct-to-consumer subscribers, an addition of 3 million from one quarter ago, Zaslav said. (Discovery does not break out Discovery+ subscribers individually but lumps them into a figure that also includes smaller subscription streaming services.) A hefty chunk of those added subscribers came in through Discovery’s airing of the 2020 Tokyo Olympics in international markets, which contributed to more than 1 million service sign-ups, Zaslav said. The high performance of sports streaming in international markets has motivated Zaslav to bring more sports programming and news offerings onto streaming in some fashion. But the executive remained mum on whether the company is planning a single super-service or a bundled offering, saying instead that the company will “look and see” about the right combination. “The more people to go to a direct-to-consumer product, the lower the churn. The more time they spend, the lower the churn,” Zaslav said. “That’s why we’re so excited about how much time people are spending with Discovery+, which has a library that’s being broadly viewed. The idea that people are spending hours on the product and the churn is low is encouraging … But if you could put news and sports and people go regularly for that, it’s another reason to have the service. It’s another reason to value the service. It’s another reason not to churn out of the service.”

Streaming & OTT

Discovery Taps Ex-Disney Streaming Head to Help Steer WarnerMedia Merger

Kevin Mayer to consult, while Discovery CFO Gunnar Wiedenfels will serve same role at combined company

Kelsey Sutton

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Kelsey Sutton