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The company is likely to provide additional details about its
plans to bring together the HBO Max service's collection of
dramas, comedies, movies with the reality programs of
Discovery+. The pricing and the name for the new streaming
service are still being debated internally, according to two
sources familiar with the discussions. The name and the pricing
are unlikely to be announced on Thursday.
Warner Bros Discovery also is considering free, ad-supported
services that would exist alongside its subscription service,
though no announcement is planned. One source said among the
ideas being discussed is a service built on Warner Bros' library
of classic movies, which currently attract little notice inside
HBO Max.
The plans are the culmination of CEO David Zaslav and his team's
examination of WarnerMedia's film, television, digital and
gaming businesses since the deal closed on April 8. The
executives were seeking to understand how these units work and
how best to combine WarnerMedia's operations with those of
Discovery, said one executive familiar with the process.
Areas of overlap - such as the unscripted television unit behind
such HBO Max reality shows as "FBoy Island" and "The Hype" - are
likely to be eliminated, given Discovery's strength in the
television genre, said the executive, who spoke on condition of
anonymity.
Layoffs are expected in the coming months, two of the sources
said, as Zaslav looks to cut costs and deliver the $3 billion in
savings he promised investors once the merger closed.
The company's famously frugal CEO, David Zaslav, also has
evaluated executive compensation and put talent pacts under a
microscope. One such deal that received scrutiny was the $250
million agreement WarnerMedia struck in 2019 to become the
exclusive home of filmmaker J.J. Abrams and his production
company, Bad Robot. It walked away from "Demimonde," a science
fiction series for HBO with an estimated $200 million budget.
For help in evaluating its motion picture business, Zaslav hired
former Warner Bros studio president Alan Horn, who oversaw the
"Harry Potter" and "Lord of the Rings" franchises, as a
consultant to help shape strategy.
Warner Bros Discovery is pivoting away form expensive,
direct-to-streaming movies like "Batgirl," a $90 million movie
based on the DC Comics character and featured "In the Heights"
star Leslie Grace and Michael Keaton as Batman.
The film was scheduled for HBO Max later this year. But the
studio scrapped the film after negative feedback from test
screenings suggested it needed more work - an added expense the
studio was unwilling to incur, according to one source with
knowledge of the decision.
In the future, big-budget movies will enjoy a traditional
theatrical run before reaching the streaming service, said one
person familiar with Zaslav's thinking, marking a big change
from the previous regime.
Analysts expect Warner Bros Discovery to report second- quarter
revenue of $11.84 billion and per-share earnings of 1 cent,
according to Refinitiv data.
(Reporting by Dawn Chmielewski in Los Angeles; Editing by
Kenneth Li, Matthew Lewis and Stephen Coates)
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