Two decades ago, the question of how you got your entertainment was a much easier one to answer. While the specific delivery apparatus might have been far less flexible, you knew that — with the exception of a few premium add-on channels — if you had a cable or satellite subscription, you had access to pretty much every channel you could possibly want. Then in the 2010s, media conglomerates began trying to emulate the success of Netflix, so they all launched their own streaming services and tried to create platforms that could appeal to every member of a family in order to become an indispensable part of every household’s daily viewing routine. However, the path to streaming profitability has been a long, arduous, and difficult one, so the same media executives who led the rush to streaming are now looking to reassemble the bundles that they haphazardly broke up a decade ago. Following Wednesday’s news that Warner Bros. Discovery’s Max and Disney’s Hulu and Disney+ would be forming a first-of-its-kind bundle, WBD execs discussed the shift in strategy on their first-quarter 2024 earnings call on Thursday morning.

Key Details:

• WBD execs believe that by partnering with Disney, both companies can focus on what they do best.
• CEO David Zaslav has long championed cross-company bundles.
• The goal of this bundle is to provide a well-rounded content offering at a price that makes it difficult for consumers to cancel.

Warner Bros. Discovery CEO David Zaslav has long espoused the benefits of bundling thanks in no small part to his years of running the sprawling cable cabal of Discovery channels that includes the eponymous network, HGTV, Food Network, Investigation Discovery, TLC, Animal Planet, and more. Now, as the head of one of the most expansive entertainment companies in the world, Zaslav is looking outside his own walls to find partnerships that will benefit all involved.

One of the first dramatic moves that Zaslav made after merging Discovery and WarnerMedia was to dramatically cut back the amount of kids and family-focused programming found on the company’s flagship streamer then known as HBO Max. While WBD has a fairly large assortment of legacy children’s brands and characters — including Looney Tunes, Hanna-Barbera, “Sesame Street,” DC Comics, Cartoon Network, and more — they never seemed to gain traction on streaming. This newly-announced bundle with streaming aims to remedy that.

In WBD’s Thursday earnings call, the company’s CEO and president of global streaming JB Perette noted that Disney is “the world leader” in kids and family entertainment, and via this partnership, the two major media entities will be able to provide consumers with a well-rounded slate of entertainment offerings, while also being able to focus on what each does best.

“We can get back to investing in prioritizing our lanes and our key content, they can do theirs,” Perette said. “These bundles allow us to do that while still providing the consumer with a very attractive price for the combination of products.”

Perette said that the entertainment companies’ efforts to offer every type of content inside their own proprietary streamers led them down “a very dangerous financial path” that eventually resulted in billions of dollars lost and a far more fragmented entertainment landscape than the country had ever seen before.

“At the end of the day, we know where that led,” Perette said. “We’re now getting back to all being great at what we do, and [swimming] in the lanes that we are great at.”

Zaslav echoed Perette’s ruminations over the cost of a streaming service trying to be everything to everyone. He noted that it was “way too much” for a company to attempt both from a creative and financial point of view. By refocusing on the tried and true genres that have built both halves of Warner Bros. Discovery, while also offering Disney’s family-friendly titles, the execs believe that the company will be able to deliver even better programming for their audience.

“When you see that package together,” Zaslav said, “you have the greatest offering of kids and family content, the greatest offering of adult fare, the greatest offering of scripted and non-scripted content.”

While the surprising bundle with Disney is certainly a major step for both companies, one should not expect it to be the last. In addition to the sports streaming joint venture that WBD, Disney, and Fox are planning to launch this fall — which will be available to bundle with Max — it is clear that Zaslav is open to any partnerships that will benefit his brand. WBD has previously had discussions about acquiring Paramount Global and Max is currently available to bundle with Netflix via mobile phone carrier Verizon.

In Thursday’s earnings call, Zaslav said that in addition to Netflix and Prime Video, which he believes are essentially on the same level as utilities at this point, the Disney+, Hulu, and Max bundle is “incredibly compelling” and is likely the right amount of entertainment options for many consumers.

“Our bundle plus one or two of those other services pretty much, I think, can make up the entertainment experience for most consumers very happily,” he said.

For WBD’s case, let’s hope that’s true because it was reported on Wednesday that not only will the company soon be raising the price of Max, but it will also be making significant cuts across the board, including in the form of layoffs. While there has been no official recognition of this possibility, or how it will manifest in content offerings, consumers have become increasingly fickle when it comes to subscribing to and canceling streaming services. By partnering with arguably the most popular entertainment brand in the world, WBD is hoping to create such a value in their bundle that it would be unfathomable for anyone to cancel the services, even if they are not actively engaged with each at all times.

“Even if [customers] don’t use a service in one month,” Perette said, “they still feel like they get great value, and they might use it the next month.”