Warner Bros. Discovery CEO David Zaslav said the forthcoming bundle of WBD’s Max and Disney‘s Hulu and Disney+, marks a “moment” for programmers in the streaming wars.
“It does feel like this is a moment,” Zaslav said, “in terms of what the next year, two years, will bring.” A “restructuring” is under way in streaming, he added, and “the business will look a lot different in two to three years. It will be a lot better for consumers.”
JB Perrette, CEO and President of Global Streaming and Games at WBD, said the new bundle would be an “anchor tenant” in most streaming households.
The execs delivered the remarks during the company’s first-quarter earnings call with Wall Street analysts. WBD came up short of forecasts in the quarter due to comparisons with the 2023 period and a flattening of streaming revenue.
Across the industry, Zaslav said, “there’s always been this question of distribution vs. content. I’ve always felt that in the long run the best content wins. That’s why we’ve really focused on the creative side of our company, building the TV production business, the motion picture business, bringing the best talent back to Warner Bros. … The marketplace right now has looked at the great distribution companies and said it looks like the distribution companies are going to be the companies that will be the big winners.”
WBD and Disney on Wednesday unveiled the bundled offering, saying it will launch this summer. Pricing and other details have not yet been revealed. Perrette said during the earnings call that the bundle would be “priced very attractively for the consumer.”
Perrette, who was one of the architects of Hulu during his exec run at NBC in the 2000s, observed that during the 2010s, “the industry went down a very dangerous financial path of trying to invest in every type of content in every genre to try to be something for everyone. And at the end of the day, we know where that led us to. We’re now getting back to all being great at what we do and swim in the lanes that we are great at.” Disney, for example, is “incomparable” at family fare, Perrette said, while WBD is a “world leader” in scripted drama, comedy and non-fiction.
“Synthetically, these bundles allow us” to specialize and target spending on content, he continued, “while still providing the consumer with a very attractive price for the combination of products, such that they feel like they don’t need to any more do all of the switching in and out of services.”
Execs said it is unlikely that Disney and WBD would add any additional services to the bundle. The three services included at launch are a “robust” and complementary trio, Perrette said. “We don’t feel like we need anybody else in that package to make it incredibly compelling.”
Media companies “have all learned, somewhat painfully, that the expense and the amount of content from a consumer standpoint was way too much,” Perrette said.
Amazon’s Prime Video and Netflix, as stand-alone services, have come to be regarded as “utilities,” Perrette added. A majority of consumers interested in streaming could be satisfied by keeping those two and adding the WBD-Disney bundle, he maintained. “It will put more pressure on independent services, from a churn perspective, because they’ll see likely more and more serial churners, people who come in and out on a much more ad-hoc basis.”
