Bloomberg — Warner Bros. Discovery Inc. (WBD) is renaming its streaming service Max, dropping HBO from the brand and bolstering its programming lineup in a bid to attract more subscribers.
The company unveiled the name at a press event in Burbank, California, Wednesday, where Chief Executive Officer David Zaslav and his team announced details including a new Harry Potter series and fresh features from DC Comics. Prices will range from $16 to $20 a month without advertising and $10 a month with ads, mostly in line with the current service.
“We can compete with the biggest players in the space,” said JB Perrette, head of the company’s streaming business.
Zaslav merged his former company, reality TV programmer Discovery Communications, with the parent of the century-old Warner Bros. studios last year to compete with Netflix Inc. (NFLX) and Walt Disney Co. (DIS), the world’s largest entertainment companies. They have more than twice as many streaming customers as Warner Bros., which had 96 million subscribers at the end of 2022.
While HBO remains the gold standard for producing critically acclaimed TV, Zaslav believes a portion of the country won’t pay for the service because it’s associated with high prices and coastal elites. HBO won the most Emmy Awards of any network last year and has already delivered two hit shows this year in The Last of Us and the latest season of Succession.
A new brand name and the addition of a deep library of unscripted programming, like Naked and Afraid from Warner Bros.’ Discovery Channel, could speak to viewers who don’t currently pay for HBO. It could also keep them using the app more, which appeals to advertisers.
HBO Max accounts for less than 1.5% of TV viewing in the US, according to the research firm Nielsen, drawing about as well as Peacock and Tubi, two rival services. Netflix attracts more than five times the audience each month, while Hulu and Amazon Prime Video do twice as well.
Perrette blamed this partly on the technology of the HBO Max app, which relies on humans to make most recommendations and hasn’t tailored the service to the subscriber. About 75% of viewers pick what to watch from the homepage.
“There’s a lot of stuff machines can do much better,” Perrette said.
As part of the announcement, Warner Bros. said Max will debut in the U.S. on May 23 and later this year in Latin America. Select countries in Europe and Asia will follow next year. The service’s slogan will be, “The One to Watch.” Existing HBO Max customers will continue to receive the service. Some will need to download a new app for the expanded catalog.
In addition to the DC Comics features and a new Harry Potter series retelling the original J.K. Rowling story, new scripted shows exclusively on Max will include a spinoff of the comedy series The Big Bang Theory. A prequel to Game of Thrones, called A Knight of the Seven Kingdoms, is planned for HBO.
As part of the rebranding, Warner Bros. is offering a $20-a-month ultimate version of Max. Subscribers will be able to have four users logged in and streaming at the same time. They’ll also get to download up to 100 shows and have access to a higher-resolution 4K service.
Subscribers to the $10 advertising-backed version will be allowed to have two users streaming at the same time, but no downloads. The ad-free $16 version will have a similar limit of two streams and up to 30 downloads.
Investors soured on media and entertainment companies last year after Netflix reported a drop in subscribers.
Shares of Warner Bros., which have risen more than 50% this year, remain about 40% below where they stood when the merger was completed in April 2022. They were trading at $14.28, down 4.4%, at 2:50 p.m. Wednesday in New York.
The rebranded Max service is the latest step in Zaslav’s unwinding of steps taken by his predecessor, Jason Kilar, who made streaming the top priority at the company.
Under Zaslav, Warner Bros. has increased the number of shows the company sells to competing streaming services, restored theaters as the key platform for new movies, eliminated jobs and cut back on spending — as evidenced by Wednesday’s comparatively low-key press event.
He has also resumed selling the company’s streaming services through Amazon.com Inc. (AMZN)
“Last year was a year of coming together, a year of restructuring,” Zaslav said Wednesday. “This is a real moment for us.”
Zaslav and his competitors continue to grapple with declining numbers of people who pay for traditional cable TV. Those losses threaten the profitable networks of companies like Warner Bros., Disney and Paramount Global.
Streaming services were supposed to counter those declines, but largely remain unprofitable. Slower growth at Netflix has raised concerns that streaming may never be as lucrative as cable was for traditional media companies.
--With assistance from Gerry Smith
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