Addressing the broad strokes of a Discovery Plus rollup with HBO Max as the ongoing regulatory approval process for the Discovery-WarnerMedia merger grinds along, Discovery CEO David Zaslav sought to assure investors that the two SVOD services are complementary.
“Assessing the overlap in respective subscriber basis, at least here in the U.S., we believe less than half of Discovery Plus subscribers are also HBO Max subscribers,” Zaslav told media equity analysts during Wednesday's Discovery third-quarter earnings call.
“With the right packaging,” he added, the merger “provides a real opportunity to broaden the base of our combined offering. And with our global appeal, infrastructure, and local market capabilities, our international roadmap is very much still untapped and provide meaningful upside over the coming years.”
The combined service, he said, “will appeal broadly to all demographics, young and old with strong male and female genres.”
AT&T is spinning off WarnerMedia, which will merge with Discovery in a deal valued at $43 billion and which is expected to close in mid-2022.
Zaslav described the pending merged asset, called Warner Bros. Discovery, as “a combination of two companies whose common culture of creative excellence, iconic characters, and franchises will result in a differentiated competitive offering — I believe the biggest and most compelling menu of IP for consumers in the world. Spanning comedy to true crime, kids and family, lifestyle to adventure, drama to documentaries, news, and sports, and of course, sci-fi and superheroes. I believe the most complete and balanced portfolio offered in one service in the world.”
Zaslav also expressed confidence in Warner Bros. Discovery‘s ability to drive ARPU through mechanisms such as an “ad-light” tier.
“We gain confidence in the strategic direction from our experience with ad monetization on Discovery Plus in the U.S., where advertisers covet the incremental reach demos, targetability and product flexibility, and pay premium rates to address this audience, helping make this year our highest ARPU offering,” he said.
Also during Wednesday“s Q3 call, Zaslav announced that Kevin Mayer, who oversaw the launch of Disney Plus in 2019, will consult Warner Bros. Discovery on how to handle its early marriage.
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