October 7, 2022

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Warner Bros. Discovery CFO describes HBO Max and Discovery+ as 'below the price'

Warner Bros. Discovery CFO describes HBO Max and Discovery+ as ‘below the price’

The ‘House of the Dragon’ series logo is displayed on a phone screen and the HBO Max website in this illustration taken on August 16, 2022.

Jacob Borzicki | Norfoto | Getty Images

Increase the number of subscribers to the broadcast service may slow downHowever, this does not mean that prices will not continue to rise.

HBO Max and Discovery+, Discover Warner Bros.CFO Gunnar Wiedenfels said during the Goldman Sachs Communacopia Tech conference on Tuesday that the two leading streaming services are “essentially underpriced.”

Wiedenfels suggested that the company has plenty of room to raise prices given the strength of content on the services, which will be combined into one next year. Last month, Warner Bros. said. Discovery plans to launch its combined HBO Max-Discovery+ service in the United States in mid-2023, with international markets following.

While Warner Bros. has not announced. Discovery of how to price the bundled service, Wiedenfels’ comments suggest that the company may use the merger as an opportunity to raise prices. HBO Max is currently priced at $14.99 per month without ads and $9.99 per month with commercials. Discovery+ is $6.99 per month without ads and $4.99 per month with commercials.

Wiedenfels . noted HBO Max wins more Emmys (38) more this week than any other streaming service. HBO’s “White Lotus” Won the most awards during Peak party with five, including Outstanding Limited Series. Wiedenfels said Warner Bros.’ strategy Discovery is combining HBO’s award-winning programming with lighter factual content from Discovery, which should reduce “inconvenience” or the number of subscribers canceling the service.

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Lots of price hikes

Netflix It is currently the most expensive major streaming service with a standard plan price of $15.49 per month. Disney announce Rising prices For Disney+, ESPN+, and Hulu last month, including raising the price of Disney+ without ads from $7.99 a month to $10.99 a month.

Warner Bros. Discovery set new goals for broadcast subscribers last month, including 130 million global subscribers by 2025. The company also reaffirmed its forecast that the streaming business will break even by 2024 and generate $1 billion in revenue by the end of 2025.

Wiedenfels said Warner Bros. Discovery does not pursue subscriber growth at any cost. This change – to prioritize profitability over growth – allows the company to have more “pricing power” over its streaming business, he said.

“We don’t optimize for subscribers,” said Wiedenfels, who called this type of strategy “old world flow” thinking.

CNBC’s Sarah Whitten contributed to this report.

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