HBO Max & Discovery + To Give Netflix And Hulu Stiff Competition

There are so many streaming options out there at so many different price points, it can make your head spin. There has been speculation for months that once the Warner Media/Discovery Communications merger closes they will combine their streaming services, a decision was announced on March 14 by Discovery CFO Gunther Weidenfels (soon to be Warner Bros. Discovery CFO) that this was a go.

Speaking at the Deutsche Bank 30^th Annual Media, Internet & Telecom Conference Weidenfels said “One of the most important items here is that we believe in a combined product as opposed to a bundle… We believe that the breadth and depth of this content offering is going to be a phenomenal consumer value proposition.” He said it would take several months to do this logistically, but eventually the two services will become one.

There was no word on whether or not CNN+ would eventually be melded with the HBO Max and Discovery bundle, an option the company has reportedly been considering. But with the successor to Jeff Zucker, executive producer and showrunner for “The Late Show with Stephen Colbert” Chris Licht not even taking the helm at CNN yet, this decision may have to wait until he has been on the job for a few months.

Although much of the mainstream press focused on the combined HBO Max and Discovery + being a big competitor to Netflix, it’s likely to do more damage to Hulu, which just got the news from Comcast’s NBCUniversal unit that they were removing a significant amount of content from the service in order to fuel the success of its own streaming service, Peacock.

Trying to put a positive spin on it, a Hulu spokesperson said “With the proliferation of streaming services entering the marketplace, we have long anticipated changes to our third-party content offering and over the past few years have increased our investment in original content, including popular and award-nominated titles like “Only Murders in the Building,” “Dopesick,” “Reservation Dogs,” “How I Met Your Father,” and the Academy Award-nominated ‘Summer of Soul.’”

Although it is true that Hulu has increased its programming budget to do more originals, HBO Max has done significantly more, both with new original series and bringing hit movies to the service sooner than it did pre-pandemic.

There is also the question of the value of Hulu. Earlier this month NBCUniversal said it had terminated an agreement which allowed the Walt Disney Company to air popular programs like “The Voice” and “Saturday Night Live” on Hulu the day after their broadcast airing and they will be exiting the joint-venture with Walt Disney.

Back in 2019, the two entertainment giants signed an agreement giving Walt Disney operational control of Hulu, while Comcast entered into a put-call agreement for its 33% stake, giving it the right to sell the one-third equity interest in Hulu back to Walt Disney.

Disney Guaranteed the minimum equity value of Hulu would be $27.5 billion, something which seems high given the content being pulled from the service. There has been no word of a sale price as of yet, and the two companies may have this resolved in arbitration (they were in arbitration over the value of Hulu last year) if independent valuation experts don’t come up with a value north of $27.5 billion.

Source: Forbes