Discovery and WarnerMedia are on track to finalize their merger in mid-2022 but it may be a while before Discovery+ and HBO Max combine to become a single platform.
During today’s earnings call, JB Perrette, president and CEO of Discovery Streaming and International, discussed how Warner Bros Discovery will approach combining its individual streaming technology platforms. He said there may be two phases: an initial phase that allows for quick bundling of the services and a second phase that allows for a common service on one tech platform.
Discovery and WarnerMedia have an “incredibly attractive tech buffet” to choose from and Perrette anticipates they will take the best parts from both platforms and build them into a common platform going forward.
“There will be meaningful cost savings from combining into one platform. I think there also will be meaningful consumer benefits from combining into one platform,” he said.
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Discovery said that, in markets where it has not yet launched Discovery+, it may be able to more quickly combine its content with HBO Max into a joint platform. That is why Discovery is currently taking a more disciplined and tactical approach to rolling out Discovery+ in more markets, so it can minimize the need to re-platform two services.
“I think speed to market will be a variant of both where we have and haven’t launched, number one, and number two, the final decisions on exactly which parts of the tech platform we migrate to will influence how long it takes us to get there,” he said.
Discovery said it ended the third quarter with 20 million paid streaming subscribers, an increase of 3 million over where the company ended the second quarter. The company attributed the growth in part to the 2020 Tokyo Olympics, which reached more than 372 million people in Europe across TV and digital platforms and delivered 1.3 billion minutes of Olympics content to its streaming services.
Discovery’s total company revenue rose 23% to $3.15 billion during the quarter but total adjusted OIBDA fell 24% year over year to $726 million.