Could price hikes be coming to HBO Max and Discovery+?
It’s certainly a possibility, said Warner Bros. Discovery Chief Financial Officer Gunnar Wiedenfels during the Goldman Sachs Communacopia Tech Conference on Tuesday, as both streamers are “fundamentally underpriced.”
Right now, HBO Max costs $9.99 per month with ads and $14.99 without them. The monthly cost of Discovery+ is $4.99 with commercials and $6.99 without.
Given the quality of the content on the services, Wiedenfels said Warner Bros. Discovery has plenty of opportunities to hike prices. The two streamers are set to merge in mid-2023, but that timeline could potentially see some delays, as he notes neither is “perfect” right now, per The Hollywood Reporter.
HBO Max has an “amazing content offering” and “more of the must-have features,” while Discovery+ has a “cleaner” user experience, the news outlet noted.
“We had to rebuild, taking the best parts of both platforms and rebuild a new state-of-the-art structure,” which will take some time to ensure the two streamers are “perfect complements,” he said.
Even though the company has not yet said how much the merged service will cost, his remarks imply that Warner Bros. Discovery may use the new streaming service as an opportunity to raise pricing, according to CNBC.
Price hikes are unfortunately becoming more common.
Netflix and Prime Video announced price hikes at the start of this year, and Disney announced price increases for Disney+, ESPN+ and Hulu last month.
Last month, Warner Bros. Discovery unveiled new streaming subscriber goals, with 130 million global subscribers expected by 2025. The business reiterated its goal of breaking even in its streaming division by 2024 and turning a $1 billion profit by the end of 2025.
But, according to Wiedenfels, Warner Bros. Discovery is not pursuing subscriber growth at any costs. The decision to put profitability above expansion now gives the company more price leverage over its streaming companies.
“We’re not optimizing for subscribers,” said Wiedenfels, who called that type of strategy “old world streaming” thinking, per CNBC.