HBO Max and Discovery Plus will indeed one day merge into one “blowout DTC product,” confirmed Discovery chief financial officer Gunnar Wiedenfels, speaking Monday during the Deutsche Bank Annual Media, Internet & Telecom investor event.
The $43 billion spinoff of WarnerMedia from AT&T and subsequent merger of the media asset with Discovery is in the “ninth inning,” Wiedenfels said.
The immediate goal of the merged Warner Bros. Discovery will be to establish synergy for redundant technology and communications systems that currently cost the two separate companies a combined $6 billion.
“Right out of the gate, we’re working on getting the bundling approach ready,” Wiedenfels said. “But the main thrust is going to be harmonizing the technology platforms, building one very strong combined direct-to-consumer product and platform, and that’s going to take a while.”
HBO currently touts around 74 million subscribers vs. 22 million for Discovery's combined streaming subscribers. The rabbit the companies are chasing, of course, is Netflix, which has around 220 million subscribers worldwide.
“A lot of the cost-saving is actually going to come out of cost avoidance,” Wiedenfels added. “Right now we’re running two completely separate, direct-to-consumer technology stacks of marketing operations. We’re spending roughly $6 billion for technology and marketing between HBO Max and Discovery Plus. Clearly, once we have successfully migrated those technology stacks in Q1, there is going to be tremendous opportunity to reduce costs.”
