HBO Max logo on purple background (l) Warner Bros Studios tower with logo (c) Discovery + logo on blue background (r)

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Amid ‘Batgirl’ cancellation, Warner Bros. Discovery reveals plans to combine HBO Max and Discovery+, cut costs

The new service will be launched in the summer of 2023.

 

Michelle Jaworski

Internet Culture

Posted on Aug 4, 2022   Updated on Aug 4, 2022, 5:03 pm CDT

After days of online scrutiny about the future of HBO Max, Warner Bros. Discover announced that a streaming service combining HBO Max and Discovery+ will launch in the U.S. in the summer of 2023 with other markets to follow.

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Executives argued for the logic in combining the two streaming services and highlighted some of the franchises offered on each service, which were immediately mocked for tired and stereotypical depictions of each platform’s perceived audience.

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In his presentation, J.B. Perrette, CEO and President, Global Streaming and Interactive at Warner Bros. Discovery, added that “It’s only one part of our diversified approach.” The combined service, which doesn’t yet have a name, is set for a planned launch in the U.S. in the summer of 2023 with other international markets to follow; existing markets will launch before Warner Bros. Discovery focuses on new territories.

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The announcement came during a Q2 earnings call as Warner Bros. Discovery executives addressed its plans for the company. Some of its planned goals are to explore a free, ad-supported streaming model and fully embrace the theatrical experience.

Warner Bros. Discovery added that it’s not interested in the streaming business model in which everything is released on streaming at once and plans to diversify its release strategy.

“We will fully embrace theatrical,” Zaslav said during an earnings call on Thursday, name-checking The Batman and Elvis as two recent successes. “We have a different view on releasing direct to streaming films and we have taken steps to course correct the previous strategy.”

It took nearly an hour for Warner Bros. Discovery to mention the canceled films such as Batgirl, Wonder Twins, and Scoob! Holiday Haunt, which came from chief financial officer Neil Chugani. He noted that while canceling the films “was a difficult decision,” it didn’t fit with its current strategic approach.

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When an investor directly asked why Batgirl was canceled, Zaslav emphasized that Warner Bros. Discovery wanted “protect the DC brand” and referenced several DC films he was excited about including Black Adam and The Flash, as well as the priority in protecting the DC brand, all without referencing Batgirl by name.

“We are not going to put a movie out unless we believe in it,” Zaslav said.

Warner Bros. Discovery’s earnings call comes amid several days of consolidations, canceled projects, and the removal of several shows that have sparked outrage among fans, critics, and advocates for the preservation of media.

Much of the blame over HBO Max’s recent struggles is being laid at the feet of David Zaslav, the Warner Bros. Discovery CEO who headed Discovery before being appointed to oversee the newly formed company; WarnerMedia CEO Jason Kilar, who was behind HBO Max, left before the merger was finalized.

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Earlier this week, Warner Bros. shelved Batgirl, the studio’s upcoming film around the DC Comics character set for HBO Max that was well into post-production and already cost the studio around $90 million to make; the high cost was partly due to the pandemic. The animated film Scoob! Holiday Haunt also faced the ax, as did the third season of Little Ellen (which had already been made). The reason for canceling projects like Batgirl wasn’t because of quality but rather financial reasons. According to the Hollywood Reporter, Zaslav canceled Batgirl to “take a tax write-down on the $90 million film,” and it decided not to invest even more money into the film to make it fit for theatrical release.

Subsequent stories about Warner Bros. Discovery and its potential plans from HBO Max have emerged in the subsequent days, as well as even more ways the company is reportedly trying to cut costs. Some of those measures, which have been occurring quietly for weeks, included removing six HBO Max original movies (such as Locked Down, An American Pickle, and Moonshot, the latter-most which was only released in March) along with several HBO original series (Vinyl, Run, and Mrs. Fletcher, to name a few). As IndieWire explained in a post about film removals, the removed projects—which a source said weren’t widely viewed—allow another tax write-off for Warner Bros. Discovery.

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Before the call, the implications of the past few days have been troubling. There were fears over whether future projects would still be released or if finished projects would be removed from HBO Max. With rumors that HBO Max would abandon scripted shows, be gutted, and folded into the much younger streaming platform, Discovery+, and Warner Bros. Discover would cut HBO Max’s staff by 70% swirling, the fates of several renewed shows in various phases of production seemed less than certain.

And unlike shows that air on TV, streaming exclusive titles rarely ever get physical copies, so when HBO Max took those low-performing titles down, it more or less deleted those properties off the internet entirely; some of the HBO shows are still available for cable subscribers and on VOD, but that’s not always the case. As Dickinson creator Alena Smith noted, she had to beg an Apple executive to give her a physical copy of her Apple TV+ series, suggesting that if Dickinson ever went offline, she’d at least have a copy of her show to hold onto. 

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Many of the reactions to the news this week, from resurfaced interviews with Zaslav to the memes that compared Warner Bros. Discovery to 30 Rock, cast Zaslav as the villain, as well as larger corporate greed.

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“if HBO Max really is folding into Discovery Plus and ditching all the scripted content that might be the single dumbest decision made by any corporation in the streaming age,” @thesolarcoffee tweeted.

Ahead of the Warner Bros. Discovery call, the company announced that “select content from Magnolia Network” would air on HBO Max starting in September while several CNN shows would make their way to Discovery+ and be listed as part of the “CNN Originals Hub.”

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Warner Bros. Discover announced Thursday that it ended Q2 with 92.1 million combined global subscribers. It’s a slight decrease from the first quarter when you take the Q1 total of HBO or HBO Max subscribers (76.8 million) and Discovery (24 million); the decrease comes from the exclusion of Discovery legacy subscribers and AT&T subscriptions that are no longer active. But in the report released, Warner Bros. Discovery said that it had “an increase of 1.7 million versus 90.4 million subscribers at the end of Q1, as adjusted for the Company’s new DTC subscriber definition.”

“[W]e intend to maximize the value of that content through a broad distribution model that includes theatrical, streaming, linear cable, free-to-air, gaming, consumer products and experiences, and more, everywhere in the world,” Zaslav said in a statement released just before the earnings call. “We’re confident we’re on the right path to meet our strategic goals and really excel, both creatively and financially, and couldn’t be more excited about the future of our company.” 

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*First Published: Aug 4, 2022, 5:02 pm CDT