Discovery CEO David Zaslav may be more of the TV-media centric boss for all things WarnerMedia -- including HBO Max -- than the determined but less entertainment-savvy AT&T.
But don’t think for one minute that more substantial cuts are not coming.
We have already seen massive layoffs at the new Warner Bros. Discovery -- including a reported 30% of its ad-sales staff -- around 1,000 people. But now look deeper into the structural operations into the likes of HBO Max, as in those billions in TV show and film production costs.For all its success, Discovery Inc. has been a lean operation -- especially when it comes to unscripted/reality TV show production. This is opposite those TV-based media companies with high-cost scripted TV shows -- even more so for higher-cost theatrical film production which can see dramatic flops, as well as soaring success.
Still, Discovery would seem to be a better fit for WarnerMedia than AT&T, as a veteran and established TV network company taking over the reins.
Overall, this is still business. Taken all this, we can see subtle indications of a pullback, possibly in terms of limiting some high-priced exclusive-only-for-HBO Max productions.
HBO Max has had a nice growth spurt recently in terms of subscribers, critical reviews, and subscriber lift, with major critical hits such as “Hacks, “The Flight Attendant,” “WestWorld,” “And Just Like That” and “Titans.”
From all of this, there are estimates it could grow another 26% to a collective 87.6 million HBO/HBO Max subscribers by year's end, according to new research from eMarketer.
The former WarnerMedia broke new ground over a year ago when it said all 17 of its 2021 major releases would simultaneously start in theaters and on HBO Max. That annoyed theater owners big-time. Since then WarnerMedia, presided over by then-CEO Jason Kilar, has backtracked.
Still, HBO Max was not going to give up on running some movies exclusively on the streamer -- mostly lower-performing, adult-themed, no-computer-generated-effect films.
Discovery might like to put the kibosh on this expensive habit as well.
Cost-cutting is key when it comes to big business mergers; Discovery promised Wall Street to make some $3 billion in overall savings in putting together the two companies.
Figure that it is not just high-priced movies, but rather, high-priced TV shows.
To date, HBO Max has figured out a way to keep its brand patina -- glossy, high-priced, edgy TV shows alive with the likes of “Hacks,” “Barry,” and “The Flight Attendant.”
The major question is what other cuts --- ahem, “synergies” -- will be coming to HBO Max. This coincides with all the talk of a streaming platform merger, with Discovery. In that regard, will the HBO name and even the word “Max” even be around?