Warner Bros Discovery Embraces Aggression Including Price Hikes While Netflix Goes On An Austerity Drive
Warner Bros. Discovery, Inc (NASDAQ:WBD) CFO Gunnar Wiedenfels expressed the possibility of higher streaming service prices despite the slowdown in their subscriber growth, CNBC reports from Goldman Sachs Communacopia Tech Conference.
He called WBD’s two flagship streaming services, HBO Max and Discovery+, “fundamentally underpriced.”
Wiedenfels indicated ample room to raise prices, given the strength of the content on the services, that he looked to merge into one next year.
In August, WBD shared plans to launch a combined HBO Max-Discovery+ service in the U.S. in mid-2023 and gradually extend it globally.
Wiedenfels noted HBO Max beat its rivals by bagging the highest number of Emmys (38) this week. Discovery’s strategy is to combine HBO’s award-winning programming with Discovery’s lighter reality content, which should reduce “churn.”
Wiedenfels acknowledged that prioritizing profitability over growth allows it more “pricing power” over its streaming businesses. He shunned chasing subscriber growth calling it “old world streaming” thinking.
Netflix, Inc (NASDAQ:NFLX) tops as the costliest primary streaming service. However, it has pared back its real-estate footprint, restricted corporate swag, controlled cloud-computing costs, and hired more junior staff to beat the subscriber slowdown.
Netflix also looks to restrain spending heavily on movies and TV shows. Netflix lost nearly one million subscribers in the June quarter to competition.
Price Action: WBD shares traded lower by 0.39% at $12.90 in the premarket on the last check Wednesday.