HBO Max, owned by Warner Bros. Discovery, stands by its strategy to release new episodes of popular shows one by one, despite viewers becoming accustomed to the full-season releases that proliferated on streaming platforms over the past decade.
“The best way to drive interest and engagement is not by dropping the entire season on a platform all at once, but by allowing the buzz and anticipation to build over time,” said David Zaslav, Warner CEO, in an earnings call yesterday (Feb. 23). The executive is the former head of the cable division at NBC Universal.
After years of offering alternatives to traditional television models, streaming platforms are increasingly reverting back to older ways of doing things. After launching without ads, Netflix and Disney+ introduced ad-supported tiers to their services last year to diversify their revenue streams and reach new consumers. Amazon Prime Video, YouTube TV and Apple (AAPL) TV paid for live sports broadcasting rights, a staple of broadcast television, to attract new audiences and monetize them from showing ads.
Netflix popularized binge watching by releasing full seasons of shows House of Cards and Orange Is the New Black in 2013. The full-season dump became the norm for streaming platforms, but they have increasingly abandoned the practice in recent years. Netflix is releasing new You and Firefly Lane seasons in two parts this year. Some of HBO Max’s most popular shows—including Euphoria, House of the Dragon, White Lotus and its latest hit The Last of Us—were all released weekly.
“It reminds me of my time at NBC when Thursday Night was must-see TV,” Zaslav said in the earnings call. “Those shows had a supersized effect on people and culture.”
Warner Bros. Discovery’s streaming increases don’t offset its high costs
In the three months ended Dec. 31, Warner’s streaming platforms—Discovery+ and HBO Max—gained 1.1 million subscribers, bringing the company’s total to 96.1 million, according to its earnings statement. Netflix has 231 million subscribers, while Disney+ has 162 million.
Its streaming services earned $2.45 billion in the same period. While revenues increased from the same time last year, they weren’t enough to offset losses. Warner’s streaming business cost the company $217 million over the three months. That’s down from the three months ended Sept. 30, in which streaming cost the company $634 million.
Warner’s isn’t alone in hosting unprofitable streaming platforms. Most services reportedly aren’t making money for their parent companies, including Disney+, Apple TV+ and Amazon Prime Video.
“Last year was a year of restructuring,” Zaslav said in the call. “2023 will be a year of building.”
The company will make new movies in the Lord of the Rings, Batman and Superman franchises in the coming years, Zaslav said. It will also take “full advantage” of its Harry Potter and Game of Thrones intellectual property as well, he said, though he didn’t specify what new content is coming.
