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It should come as no surprise that HBO Max is about to find itself in a world of hurt. It’s bigger and more successful than its current sibling streamer, Discovery Plus. But it’s also part of Warner Bros. Discovery, a company now run by David Zaslav, and Zaslav is a man who loves him a bit of reality TV and that’s fine gastrointestinal tracts, cool shows cancellation, and ax tapes if it means the ledgers will look a little nicer. Now, a few days after his company canceled Bat girl for tax write-offthere are rumors that HBO Max will also break out.
According to the latest estimates, HBO Max, despite a terribly poor app, had over 76.8 million global subscribers. Discovery Plus, the service launched by Zaslav before the merger, had about 22 million. It is consistently the third largest streaming service by subscribers, behind Netflix and Disney Plus. HBO Max, again despite being a terrible app in need of a total overhaul, felt like proof that you didn’t need huge Marvel- and star war-grade franchises or the luxury of Netflix being one of the first movers in the streaming space to build a strong enough streaming business. Jason Kilar, then the CEO of WarnerMedia, took a lot of things the company already had (the impressive HBO and its many successful properties, a huge catalog of WB movies and TV shows, and a big fancy bag of successful intellectual property like DC Comics and Harry Potter) and formed HBO Max.
To better differentiate HBO Max from Disney Plus and Netflix, Kilar also risked upsetting Hollywood by offering some particularly important incentives to customers stuck at home due to the pandemic. HBO Max had the day and release date for theatrical movies.
Zaslav was supposedly not a fan of Kilar’s strategy. Never mind that his company merged with Warner Bros. and came up with a much less popular streaming service full of stuff you watch while you’re doing laundry or stuck at your parents’ house for the weekend. Never mind that the streamers’ broader strategy is to produce “appointment TV” to compete with YouTube, TikTok and Twitch. Zaslav is a reality TV guy. He built Discovery into a reality TV empire and has long favored quick, cheap and easy reality over that more prestigious but expensive scripted television.
Earlier this year, he hinted that disaster was coming for the fledgling HBO Max. “Our goal is to compete with the top streaming services, not to win the spending war.” he said on a call in February. In the same call, CFO Gunnar Wiedenfels said the new company will pursue “content efficiencies.”
The wrap and guys on Twitter claim that Warner Bros. Discovery may announce a major restructuring today during the company’s second-quarter earnings call. The business side of HBO Max will apparently bear the brunt, with 70 percent of development staff being laid off — according to an unnamed source The wrap talk to.
The idea is that HBO will continue to be a marquee product for Warner Bros. Discovery, but HBO Max, the streaming service that hosts the library of HBO and Warner Bros. and a surprisingly robust stable of original programming, will disappear, merging into a new app that will house all current content for both HBO Max and Discovery Plus (with the obvious exception Bat girl).
We’ve known the two apps would be combined since March, when Wiedenfels confirmed it at Deutsche Bank’s 30th Annual Media, Internet & Telecom Conference. At that timecalled for “some very, very detailed and disciplined planning” for transitioning customers and merging into two services.
If the rumors are true for today, either plans have changed or someone didn’t get the memo. Instead of a reflective mood, the last few days have been chaos for the company. Its cancellation Bat girl has sent shock waves across the entertainment world. The next day, HBO Max has quietly pulled a number of HBO Max exclusive movies from service and canceled others in production, further raising fears. (Fortunately, captured movies are still available. Instead of being stuck in the vault with bat girl, are now only available on request for sale or rent.)
This morning, HBO Max announced that Discovery favorites Chip and Joanna Gaines will be bringing select content from their Magnolia Network to the streaming service. “We look forward to bringing these stories we love—including our next adventure, Fixer Upper: The Castle—to HBO Max this September,” said a statement from the pair in an HBO Max press release. Things are suddenly moving very quickly at Warner Bros. Discovery, and the shiplap is on the wall.
What this means for HBO Max’s many current originals remains to be seen. It looks like Hacks, Harley Quinnand Our flag means death they have won great accolades and vocal fans. Other shows have died on the vine – Ridley Scott’s sci-fi show; Raised by Wolves it was just canceled after two mediocre seasons. Later today, Zaslav could repeat what his company did at the CW and launch a second “Red Wedding”, he goes on a cancellation spree to distance himself further $55 billion in debt arising from the merger.
This debt is a sword hanging over the company’s head. And HBO Max, the high-priced streamer trying to compete with Disney and Netflix, can be used as a shield to protect the still-profitable cable business at the heart of Warner Bros. Discovery.
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