Warner Bros. Discovery CFO says company's streaming services are 'underpriced'

Streaming work subscriber maturation may beryllium slowing, but that doesn't mean prices won't support rising.

HBO Max and Discovery+, Warner Bros. Discovery's 2 flagship streaming services, are "fundamentally underpriced," Chief Financial Officer Gunnar Wiedenfels said during the Goldman Sachs Communacopia Tech Conference connected Tuesday.

Wiedenfels suggested the institution had ample country to rise prices fixed the spot of contented connected the services, which volition beryllium merged into 1 adjacent year. Last month, Warner Bros. Discovery said it planned to motorboat a combined HBO Max-Discovery+ work successful the U.S. successful mid-2023, with planetary markets to follow.

While Warner Bros. Discovery hasn't announced however it volition terms a combined service, Wiedenfels' comments suggest the institution whitethorn usage the merging arsenic a accidental to rise prices. HBO Max is presently $14.99 per period without ads and $9.99 per period with commercials. Discovery+ is $6.99 per period without ads and $4.99 per period with commercials.

Wiedenfels noted HBO Max won much Emmys (38) this week than immoderate different streaming service. HBO's "The White Lotus" snared the astir awards during the prime-time ceremonial with five, including Outstanding Limited Series. Warner Bros. Discovery's strategy is to harvester HBO's award-winning programming with Discovery's lighter world content, which should trim "churn," oregon fig of subscribers who cancel the service, Wiedenfels said.

Netflix is presently the astir costly large streaming work with a modular program terms of $15.49 per month. Disney announced price increases for Disney+, ESPN+ and Hulu past month, including bumping the terms of Disney+ without ads from $7.99 per period to $10.99 per month.

Warner Bros. Discovery acceptable caller streaming subscriber targets past month, including 130 cardinal planetary subscribers by 2025. The institution besides reaffirmed its anticipation for its streaming concern to interruption adjacent by 2024 and output $1 cardinal successful nett by the extremity of 2025.

Warner Bros. Discovery isn't chasing subscriber maturation astatine each costs, said Wiedenfels. That alteration — to prioritize profitability implicit maturation — allows the institution much "pricing power" implicit its streaming businesses, helium said.

"We're not optimizing for subscribers," said Wiedenfels, who called that benignant of strategy "old satellite streaming" thinking.

--CNBC's Sarah Whitten contributed to this report.

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