WBD Exec: ‘We Can Create a Tubi, Pluto Ourselves’; New FAST Service Will Offer Library Shows, Recent Popular Titles

Warner Bros. Discovery held its quarterly earnings call on Thursday, Feb. 24. Apart from reporting that its two streaming services HBO Max and discovery+ had added 1.1 million new global users, the call offered plenty more insight into the company’s evolving streaming strategy.

Part of that evolution is the planned addition of a free ad-supported TV (FAST) service to the company’s streaming lineup. WBD is planning to launch a FAST service this year, and executives shed a bit more light on what that service might look like.

WBD streaming chief JB Perrette said that shifts in the streaming market have led more customers to buy into the concept of ad-supported streaming, and that WBD is being very deliberate with its entrance into the FAST space.

“FAST is one area that as we look at the evolution of consumer behavior, we look at obviously a lot of the free-to air viewing moving to, what we call, free-to-view online,” Perrette said. “And we don’t yet have, we think, a strong enough position in that market. The Roku and the Tubi deal was really just a toe in the water, if you will, 14 channels, a beginning for us, but there’ll be more to come as we go through the year, and we do want to have a bigger presence in that space because we do see consumer behavior continuing to shift and having a very robust amount of consumers around the world, who will want to consume ad-supported content.”

The Roku Channel and Tubi deal referenced was an agreement between WBD and those streamers that was announced at the end of January. The deal sent several series removed from HBO Max in 2022, including “Westworld” and “The Nevers,” to the two free streaming services, and judging by Perrette’s comments there may be more licensing deals to come before WBD rolls out its own FAST service.

Executives struck a confident tone that launching an ad-supported video-on-demand (AVOD)/FAST service would not infringe on other streaming segments, nor would it disrupt WBD’s theatrical and linear TV revenue streams. When asked how this could be achieved, WBD CEO David Zaslav said that the company would use such a service to host older shows deeper in the HBO Max library first, before moving on to bigger name series that are still producing new seasons.

“At HBO Max, the majority of viewership of content [from] HBO was only 40% of the content,” the CEO said. “So there was 60% that was hardly being viewed. And we need to monetize that in order to drive shareholder value. And once we establish this funnel, then we can take things like the first season of ‘Succession’ or the second season. We can put that down on our AVOD service.”

Zaslav then explained that the company looks at a FAST service as a way to potentially drive customers to a paid tier of its service.

“If you loved [the FAST experience], you can come up and you could then pay for on AdLite or in subscription,” he said. “And basically, we create a flywheel of our own, where we own the full ecosystem, the subscription, the AdLite and the ad-free. And we take advantage of all the content that we have.”

More details about an AVOD/FAST offering from WBD will likely be released when the company unveils its new HBO Max streaming platform with discovery+ content on April 12.