Warner Bros. Discovery (WBD - Free Report) announced that it is increasing the HBO Max’s ad-free subscription fee in the United States by $1 to $15.99 plus taxes a month, applicable from Feb 11 onwards. This is the first ever hike done by the streaming platform since its launch in 2020.
HBO Max also launched a cheaper ad-supported plan last year but the slowdown in the advertising market didn’t let HBO benefit from it.
Thus, to bolster revenues from the streaming division, Warner Bros. Discovery had to consider a hike in the monthly rates. This makes HBO the second most expensive OTT platform after its rival Netflix (NFLX - Free Report) , whose monthly plans are at $19.99.
However, the upcoming recessionary fears could draw back users from spending such high amounts on their recreational activities. On top of that, the massive content slashing by HBO Max to cut down on its costs makes the streaming platform even more unattractive for users.
Shares of Warner Bros. Discovery are down 59.5% year over year against the Zacks Consumer Discretionary sector, which fell 30.1% in the same time frame.
Warner Bros. Discovery Merges Its Streaming Division for Better Growth
Warner Bros. Discovery announced some time back that it is working on the strategic restructuring of HBO Max and Discovery Plus in spring 2023, which will be renamed under one unit as Max.
In the third quarter of fiscal 2022, HBO Max and Discovery+ added 2.8 million subscribers globally, bringing the total to 94.9 million. Though a positive figure, this did not meet the expectations of the analysts at Wall Street who estimated a net addition of 3.27 million subscribers, per Tech Crunch.
This merger is expected to bring together the combined resources of both platforms and improve the content slate at Max, which will help the company attract a bigger audience.
Max will focus on providing diversified content to its viewers, which will include reality TV from Discovery, news documentaries from CNN, movies from Warner Bros., kids programming and live sports as well.
This is likely to draw viewers from all demographics and various genres and boost the company’s subscription rates.
To aid this further, Warner Bros. Discovery also made HBO Max and Discovery Plus available to Amazon’s (AMZN - Free Report) Prime Video platform, thus reversing the decision to end the distribution deal with Amazon in 2021. In third-quarter 2022, Amazon witnessed 9% growth in its subscription service sales, which stood at $8.9 billion. Thus, this deal would help the new streaming division Max cater to a larger and growing audience at Amazon.
With all these efforts, the company is aiming to reach $1 billion in earnings in the streaming division by 2025.
Zacks Rank & Stock to Consider
Warner Bros. Discovery currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked stock in the same sector is Liberty Global (LBTYA - Free Report) , sporting a Zacks Rank #1 (Strong Buy).
Liberty Global’s share price has decreased 24.4% year over year.
Where Will Stocks Go…
If Biden Wins? If Trump Wins?
The answers may surprise you.
Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!
Now is the time to download Zacks' free Special Report with 5 stocks that offer extreme upside for both Democrats and Republicans…
1. Medical manufacturer has gained +11,000% in the last 15 years.
2. Rental company is absolutely crushing its sector.
3. Energy powerhouse plans to grow its already large dividend by 25%.
4. Aerospace and defense standout just landed a potentially $80 billion contract.
5. Giant Chipmaker is building huge plants in the U.S.
Hurry, Download Special Report FREE >>
Warner Bros. Discovery (WBD - Free Report) announced that it is increasing the HBO Max’s ad-free subscription fee in the United States by $1 to $15.99 plus taxes a month, applicable from Feb 11 onwards. This is the first ever hike done by the streaming platform since its launch in 2020.
HBO Max also launched a cheaper ad-supported plan last year but the slowdown in the advertising market didn’t let HBO benefit from it.
Thus, to bolster revenues from the streaming division, Warner Bros. Discovery had to consider a hike in the monthly rates. This makes HBO the second most expensive OTT platform after its rival Netflix (NFLX - Free Report) , whose monthly plans are at $19.99.
However, the upcoming recessionary fears could draw back users from spending such high amounts on their recreational activities. On top of that, the massive content slashing by HBO Max to cut down on its costs makes the streaming platform even more unattractive for users.
Shares of Warner Bros. Discovery are down 59.5% year over year against the Zacks Consumer Discretionary sector, which fell 30.1% in the same time frame.
Warner Bros. Discovery Merges Its Streaming Division for Better Growth
Warner Bros. Discovery announced some time back that it is working on the strategic restructuring of HBO Max and Discovery Plus in spring 2023, which will be renamed under one unit as Max.
In the third quarter of fiscal 2022, HBO Max and Discovery+ added 2.8 million subscribers globally, bringing the total to 94.9 million. Though a positive figure, this did not meet the expectations of the analysts at Wall Street who estimated a net addition of 3.27 million subscribers, per Tech Crunch.
This merger is expected to bring together the combined resources of both platforms and improve the content slate at Max, which will help the company attract a bigger audience.
Max will focus on providing diversified content to its viewers, which will include reality TV from Discovery, news documentaries from CNN, movies from Warner Bros., kids programming and live sports as well.
This is likely to draw viewers from all demographics and various genres and boost the company’s subscription rates.
To aid this further, Warner Bros. Discovery also made HBO Max and Discovery Plus available to Amazon’s (AMZN - Free Report) Prime Video platform, thus reversing the decision to end the distribution deal with Amazon in 2021. In third-quarter 2022, Amazon witnessed 9% growth in its subscription service sales, which stood at $8.9 billion. Thus, this deal would help the new streaming division Max cater to a larger and growing audience at Amazon.
With all these efforts, the company is aiming to reach $1 billion in earnings in the streaming division by 2025.
Zacks Rank & Stock to Consider
Warner Bros. Discovery currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked stock in the same sector is Liberty Global (LBTYA - Free Report) , sporting a Zacks Rank #1 (Strong Buy).
Liberty Global’s share price has decreased 24.4% year over year.
Where Will Stocks Go…
If Biden Wins? If Trump Wins?
The answers may surprise you.
Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!
Now is the time to download Zacks' free Special Report with 5 stocks that offer extreme upside for both Democrats and Republicans…
1. Medical manufacturer has gained +11,000% in the last 15 years.
2. Rental company is absolutely crushing its sector.
3. Energy powerhouse plans to grow its already large dividend by 25%.
4. Aerospace and defense standout just landed a potentially $80 billion contract.
5. Giant Chipmaker is building huge plants in the U.S.
Hurry, Download Special Report FREE >>
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