During an earnings call on Thursday, Warner Bros. Discovery touted several accomplishments, including growing global subscribers to 94.9 million; its strong content slate, featuring Game of Thrones spinoff House of the Dragon; and that it will be rolling out its combined HBO Max and Discovery+ streaming service sooner than expected.
However, CEO David Zaslav also threw out some controversial statements surrounding the company’s content strategy, including reiterating the need to cut 37 titles from HBO Max’s library.
While all that news generally dominated the headlines, here are the other important tidbits that were discussed:
HBO Max’s price hike
JB Perrette, CEO and president of global streaming and interactive at the company, predicted streaming prices would move “north” of its current offerings and the ad load could be doubled on the ad-supported tier.
HBO Max debuted in May 2020 with a $14.99 monthly price tag. The cost has not risen for the ad-free version despite other streamers hiking rates. The cheaper ad-supported tier launched in June 2021 at $9.99 per month.
Perrette said since the company has not hiked prices in three years, there’s an “opportunity, particularly in this environment,” to increase prices, as other streamers implement rate hikes and the world is plagued by inflation.
Beyond this, he offered little guidance on how much prices would increase or when a rate hike would happen.
This isn’t the first time WBD has mentioned the possibility of raising prices. In September, WBD CFO Gunnar Wiedenfels said during the Goldman Sachs Communacopia Tech Conference that both HBO Max and Discovery+ are “fundamentally underpriced.”
Given the quality of the content on the services, Wiedenfels said WBD has plenty of opportunities to hike prices.
More ads to come
WBD has been a bit shocked by a lower-than-expected number of subscribers switching to the HBO Max With Ads package, according to Perrette.
This, he said, gives the company the assurance it needs to increase the number of ads on the ad-supported plan.
Currently, the ad-supported tier runs two to three minutes of ads per hour, which is half of Discovery+’s ad load.
“We have almost 100% growth of new inventory available to us as we look to combine the ads of those two products,” he said.
WBD’s FAST offering
On the call, Zaslav said the company is interested in creating its own free, ad-supported streaming TV offering.
“Once our SVOD service is firmly established in the market, we see real potential and are exploring the opportunity for a fast or free ad-supported streaming offering that would give consumers who do not want to pay a subscription fee access to great library content, while at the same time serving as an entry point to our premium service,” Zaslav said.
Previously, the CEO mentioned that WBD was “exploring” a foray into FAST.
“As a company with the largest film and TV library in the industry, we have a unique opportunity to increase our addressable market and drive real value, and we plan to move quickly,” he said.