Netflix’s goal was to surpass HBO before HBO could become like Netflix, a feat it accomplished. Now, Warner Bros. Discovery (WBD), led by CEO David Zaslav, is teaming up with Disney and others to establish a streaming bundle resembling traditional cable TV to compete with Netflix before it widens its lead over legacy media.
On a recent earnings call, Zaslav emphasized that streaming is a generational disruption, and the new partnership between WBD and Disney, which bundles Max, Disney+, and Hulu, represents a shift in how people consume content. Zaslav believes the next couple of years will bring significant changes to the industry as the bundle reshapes viewing habits.
Pricing for the Max-Disney+-Hulu bundle hasn’t been disclosed, but WBD executive JB Perrette mentioned it would be very attractively priced. Currently, a Disney+/Hulu ad-free bundle costs $19.99/month, while Max is $15.99/month. The combined package is expected to offer a discount from the $36 total for separate subscriptions.
The bundle will be prominently marketed across Disney and WBD platforms. Perrette explained that offering a synthetic bundle will help increase subscriber value and reduce service cancellations while improving content spending efficiency.
Perrette acknowledged that, in the past decade, media companies spread themselves too thin by investing in all genres. He emphasized that Disney and WBD can now focus on their strengths: Disney’s excellence in kids and family content, and WBD’s leadership in scripted drama, comedy, and nonfiction programming. The bundle allows both companies to specialize while giving consumers the benefits of comprehensive content at a single price.
Disney+, Max and Hulu Bundle Reflects a 'Restructuring' of Streaming Viewing, Warner Bros. Discovery Chief Says https://t.co/ck26QlrCbD
— Variety (@Variety) May 9, 2024
Even if customers don’t use all services each month, they will still perceive value in the bundle, Perrette noted. He believes this approach will keep subscribers from frequently switching between services, ultimately increasing overall satisfaction.
Zaslav pointed out the market’s irrational spending on streaming content, noting that quality, not quantity, is crucial. He expects the industry to look different in the next few years.
WBD’s Q1 2024 earnings fell below Wall Street expectations due to revenue declines in its studio and TV sectors. Streaming revenue held steady at $2.46 billion, while direct-to-consumer earnings improved to $86 million from $50 million in Q1 2023. Source
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