The merger of Discovery and WarnerMedia will create one of the largest U.S. media companies. The companies plan to combine the two streaming services into one offering, according to Discovery's CFO. They plan to offer an interim solution sooner because of the changes that will take time.
It is not clear what that solution will look like.
We are working on getting the bundling approach ready, so that we can start to get some benefits early on.
He said that the main thrust is to harmonize the technology platform, building one very strong combined direct-to-consumer product and platform. The executive said that the companies will benefit from the ability to maximize marketing for the services, which is a huge cost driver at the moment.
The Warner Bros. merger is set to close in the second quarter of this year. David Zaslav will be the CEO of the new media company when the deal closes.
Speaking at the event this morning,Wiedenfels suggested the combination of the two streaming services would better reach both male and female demographic than the respective services did on their own.
He said that there was a premium male-skewing positioning on the Discovery side. I have no doubt that we will be creating one of the most complete sorts of four-quadrant sort of old, young male, female product out there.
The image is from Discovery.
The company thought of combining the services instead of bundle as its long-term strategy. He acknowledged that Disney had been successful with its bundle so far, but the company came to believe that it should include a 200,000-hour content portfolio.
The two services have good subscriber figures, with Discovery+ reaching 22 million subscribers by the end of the year.
The CFO noted that the combined service would most likely offer an ad-supported and ad-free tier, similar to the model used by Discovery+ and HBO Max.
That has worked well for us. I was happy to hear that Disney agrees with me. He said that there is another group of people who are willing to pay a lower place and don't care about advertising.
He said that it was likely the structure as we came to the market.
It will take longer than weeks to get a combined offering into the market, but the company hopes it will take months.
Pricing for the future service is not yet known, but Discovery+ is either $4.99 or $6.99 per month, for its ad-supported and commercial-free tiers, respectively.
The increasing competitiveness of the ecosystem seems to have had an impact on the incumbents in the streaming landscape. The growth of subscribers at Netflix is lower than it has been in the past. It is trying to add value to its service through the addition of mobile games as a way to boost and retain subscribers. Disney is trying to drive subscriptions by making its bundle more attractive and adding some of its add-ons to it. The direct-to-consumer service of Paramount+ will be combined with the Showtime service this summer.
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