When Discovery Chief Executive Officer David Zaslav takes control of WarnerMedia in 2022, assuming regulatory approval, he may hear a surprising yet consistent message from current executives of the company: Give our streaming service a new name.
WarnerMedia's flagship streaming product is HBO Max. After a bumpy start, the product has performed well, by both internal and external standards. AT&T, which still owns WarnerMedia, said Thursday it expects to reach the higher range of its HBO Max/HBO global subscriber target of 70 million to 73 million subscribers by the end of the year. While that's significantly fewer than Disney+'s 116 million, HBO Max has more subscribers than ViacomCBS's Paramount+, NBCUniversal's Peacock or Disney's Hulu. And WarnerMedia charges $14.99 for ad-free HBO Max, bringing in more revenue than almost every other streaming competitor for each signup.
Given HBO Max's recent success, it's possible Zaslav could decide to stick with the name. But if Zaslav chooses to add Discovery's reality programming directly to the service, rather than simply bundling Discovery+ with HBO Max, it will give him a natural opportunity to rebrand the service for a global audience.
Several current WarnerMedia executives, including outgoing CEO Jason Kilar, have wanted to change the name, according to people familiar with the matter. Thes people asked not to be identified because the discussions have been private. Kilar declined to comment for this story.
CNBC reported in December that there have been internal WarnerMedia discussions to change the name. Those talks never amounted to a change because AT&T CEO John Stankey wanted to stick with HBO Max, said the people.
Stankey and former WarnerMedia chairman Bob Greenblatt chose to call the streaming service HBO Max to showcase HBO's programming and pristine brand while conveying that the service had "so much more" than just the premium network's content. HBO Max includes Warner Bros. films, hit broadcast and cable shows such as "Friends" and "South Park," children's programming, original series, and other non-HBO content. Kilar replaced Stankey as WarnerMedia CEO in May 2020 after Stankey become AT&T's CEO. Greenblatt left the company in August 2020.
But a number of WarnerMedia executives found the HBO Max name confusing — and still do.
"It sounds like supersized HBO," said one executive who departed WarnerMedia last year. "I think it's still unclear how it's different from HBO unless you're familiar with the product. It was a typical AT&T decision."
At the time, the confusion was heightened because HBO Go and HBO Now still existed as HBO-only streaming products. Those names no longer exist.
Kilar and others toyed with the idea of calling the service something with "Warner" in the name to clearly illustrate that the service had more than just HBO, people familiar with the matter told CNBC in December.
While HBO Max at launch consisted of mostly HBO programming, Kilar's decision this year to put all new original Warner Bros. films on the service on the same day they hit theaters made the HBO branding less essential. The service has also found success with original hits including "The Other Two," a reboot of "Gossip Girl," and the DC Comics coming-of-age drama "Titans," neither of which came from HBO.
HBO Max also includes a lot of children's programming, while HBO is known for its premium quality adult dramas and comedies. Adding Discovery originals and programming from channels including HGTV, Food Network and Animal Planet will further push the service away from its HBO roots.
"It's really our cable bundle. It makes more sense for HBO to live as a sub-brand of a renamed service," said one current WarnerMedia executive. "This can all be fixed. David [Zaslav] will have a chance to fix it."
Discovery can't speak directly with WarnerMedia executives on how to move forward until regulators approve the deal. Zaslav hasn't commented if he plans to pair Discovery's content with HBO Max or keep it separate. If the name does change, it wouldn't be the first time a streaming service has transformed the brand after launching. ViacomCBS changed the streaming service CBS All Access to Paramount+ after merging Viacom with CBS.
Zaslav may decide a name change is too destabilizing for a brand that's already suffered from confusion. But investors will be pushing the company to meet its target for $3 billion in cost synergies. Giving the two services the same platform is an easy way to save money on sales and technology.
Executives from AT&T and Discovery are optimistic the deal will be approved in the first half of 2022.
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October 22, 2021 at 01:05AM
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Some top WarnerMedia execs never liked the name 'HBO Max' — the Discovery deal will give them a chance to change it - CNBC
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