Zaslav: Family Programming, News, Sports Will Allow Warner Bros. Discovery to ‘Attack’ Churn on Max
The launch date for Max is fast approaching. The new Warner Bros. Discovery streaming platform will roll out on May 23 in the United States, and will combine HBO Max’s current library with most of the titles now available exclusively on discovery+.
WBD held its quarterly conference call to discuss its earnings report on Friday, giving executives the chance to further discuss Max. CEO David Zaslav was highly optimistic, but noted some key differences between HBO Max and discovery+ that he hopes will aid the company in fighting its biggest opponent: subscriber cancelation, also known as churn.
“[It’s] very difficult to build a strong business with churn,” the CEO explained. “The churn on discovery+ is quite low. The churn on HBO Max is high. And so driving that churn is as or maybe more important than driving the growth. If we can drive down the churn, the growth will be very substantial. And so we have a series of attacks in order to do that.”
Zaslav explained that family programming is key to helping drive down churn. That’s why company representatives were so careful to highlight the amount of child-friendly content that will be available on Max during the April 12 press event that unveiled major details about the service.
“We’ve been at this in Europe for more than eight years, the more people to use HBO Max in the family, the more engaged people are, the broader the offering, the lower the churn,” Zaslav said during the earnings call.
There are certainly plenty of well-known brands for WBD to make use of if it wants to highlight family-friendly programming. The company holds the rights to the “Looney Tunes” characters, “Sesame Street,” Hanna Barbera classics such as “Scooby-Doo,” and even more action-oriented properties like DC comics. Much of discovery+’s programming is also approved for all ages, with a wealth of nature, cooking and lifestyle content.
If family programming alone isn’t enough to reduce churn in a meaningful way for Max, WBD has other alternatives. The company owns CNN, and holds the broadcasting rights to some NBA, NHL and MLB games, so it could start deploying live news and sports onto Max if it feels it needs to keep building out the service to bring down churn.
“This is a business of artillery,” Zaslav said. “We’re adding a lot of artillery here to the offering in order to get more viewers in the family engaged and excited about the amazing quality content that we have. But we have more weapons, and we have sports and we have news. And those are on the sidelines right now. We have a great product. Let’s drive that. Let’s drive the brand. And know that we can move to the left and to the right with sports and news, which we’ve done in markets in Europe, which has been additionally advantageous.”
WBD holds the European streaming rights to the Olympics and uses discovery+ to distribute the games in Europe. The service also carries cycling, tennis, soccer, and more there, so while WBD hasn’t used its streaming platforms to show much in the way of live sports domestically — the service streams some U.S. Men’s and Women’s National Soccer Team games, but that’s about all — it does have plenty of experience in the sports streaming arena. Zaslav’s comments echoed his statements during the April 12 press conference when he alluded to live news and sports as things that could be added to Max in the future, but wouldn’t be a big part of the service for its initial launch.
It’s a wise move on WBD’s part to have solutions for churn ready to go. Churn has become a bigger and bigger problem as the streaming marketplace has grown more crowded, and user budgets shrink. Many customers now practice a form of churn called cycling, in which they sign up for a service to watch a particular title, then cancel their account before the next billing cycle. One survey from February found that 69% of streaming users were considering cycling at least once during 2023.
There’s no knowing how the launch of Max will actually go until it occurs, but at least WBD has a clear roadmap in place. The company knows it has to combat churn rates, but it has several weapons in its arsenal to boost user engagement and drive churn aggressively down.
Max
Max is a subscription video streaming service that gives access to the full HBO library, along with exclusive Max Originals. There are hubs for content from TLC, HGTV, Food Network, Discovery, TCM, Cartoon Network, Travel Channel, ID, and more. Watch hit series like “The Last of Us,” “House of the Dragon,” “Succession,” “Curb Your Enthusiasm,” and more. Thanks to the B/R Sports add-on, users can watch NBA, MLB, NHL, March Madness, and NASCAR events.