The company is projecting that the streaming division will break even by next year and be profitable in two years. In the company’s most recent quarterly earnings, streaming lost $217 million, cutting losses significantly from a few months ago, and was regarded as a win by some analysts.
Because of the focus on profitability — and the fact that the streaming service is a combination of Warner Bros. Discovery’s existing services, not an entirely new one — the Wednesday announcement will hardly look like the splashy streaming dog and pony shows that media companies staged just a few years ago.
When Disney held an event to announce Disney+ in April 2019, it did so over three and a half hours in an extravagant showcase for investors. Likewise, Apple staged a star-studded event that previewed Apple TV+ at its campus in Cupertino, Calif., in March 2019, flying in dozens of boldface names like Oprah Winfrey, Steven Spielberg and Jennifer Aniston.
By contrast, Warner Bros. Discovery’s event will be just over an hour and feature no stars, said the people with knowledge of the company’s plans. Instead, the event will unveil the new service’s name, marketing plans and technological upgrades, as well as some TV series and movie announcements.
It is not yet clear how existing subscribers will migrate from HBO Max to the new service once it’s available. That is one of the topics that executives are expected to address on Wednesday. Discovery+ will remain a stand-alone app.
Some analysts question whether combining Discovery’s library of programming with the scripted shows available on HBO Max will put the new combined app over the top. Julia Alexander, the director of strategy at the research firm Parrot Analytics, said she was “skeptical that it will drive the level of subscriber acquisition that some on Wall Street are looking for.”
But, she argued, it will help with time spent on the app, pointing to data that many subscribers use streaming services for ambient television experiences — the kind of watch-it-while-you-fold-the-laundry fare that is Discovery’s bread and butter with brands like HGTV and the Food Network.
John Koblin
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