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Discovery+ Vanishes from Merger Talk
7 Oct
Summary
- Skydance plans to merge HBO Max and Paramount+ into one app.
- Discovery+ is a profitable, low-churn service with millions of subscribers.
- New management seems to overlook Discovery+ amidst debt concerns.
Skydance chairman and CEO David Ellison has revealed a long-term strategy to combine HBO Max and Paramount+ into a unified streaming application, with immediate plans for bundling services. This announcement came during an event celebrating the Skydance and Warner Bros. Discovery merger, where the term "Discovery" was notably absent from discussions, despite the inclusion of Discovery+'s parent company.
While Discovery+ hosts content from channels like Discovery Channel, HGTV, and Food Network, it has been largely omitted from recent industry discussions and data reports. This is occurring even as the service remains profitable, reportedly in the low nine figures, and boasts a dedicated subscriber base with a low churn rate. Warner Bros. Discovery previously considered shutting down Discovery+ but acknowledged its millions of engaged viewers.
The new management, led by Skydance, faces substantial debt of $80 billion. This financial pressure suggests a focus on larger, more prominent assets, potentially sidelining Discovery+ in the immediate future. However, the service's profitability and existing user base present a business case for its continued operation, especially with potential opportunities like the Olympics broadcast rights.
Despite its current quietude, Warner Bros. Discovery's former chief financial officer Gunnar Wiedenfels had previously highlighted Discovery+'s profitability and the significant opportunity it presented. Skydance has appointed HBO chief Casey Bloys to oversee its streaming business, which includes Paramount+ and Pluto TV, but Discovery+ was not explicitly mentioned in leadership announcements.
