Does HBO Max disappear? 5 keys to understand the earthquake that threatens the streaming company

Since last April, the future of hbo max It became complicated after the Discovery and WarnerMedia merger. In the last few hours, the dismissal of a large number of company workers as well as the cancellation of the premiere of the film “Batgirl” whose filming has already finished and has cost more than 90 million dollars, among other measures such as the withdrawal of content produced by Warner from the HBO Max platform is generating an earthquake in the company and everything would point to the disappearance of the streaming service.

What will happen in the next few days? Here are 5 keys to understanding the problem that threatens to disappear hbo max or in the best of cases, reduce it to its minimum expression.

On April 9, 2022, the alliance was confirmed Warner Bros Discoveryafter completing the multimillion-dollar merger of the entertainment groups warnermedia and Discovery. The union of both companies had an approximate value of US$ 43,000 million dollars and this meant the separation of WarnerMedia from the telecommunications group AT&T, to whom it was sold in 2018 and forced to face a series of changes and restructurings that did not bear fruit.

that same month, David Zaslavcurrent director of Warner BrosDiscovery, and former SEO of Discovery for 15 years, confirmed that the objective of the new company was to concentrate its forces on the entertainment sector.

In a statement, Zaslav highlighted the importance of the merger for shareholders, distributors, advertisers, creative partners and consumers around the world, as well as predicting that “impact stories” will be produced. Executives at the combined companies, meanwhile, estimated 2023 revenues of $52 billion, gross profits of $14 billion and cost savings of $3 billion a year, which could mean cutbacks.

Four months after the birth of Warner BrosDiscovery, The first big measures are seeing the light and apparently, they are not pleasant at all. The cancellation of “Batgirl” is followed by the withdrawal of several original productions of hbo max of the platform.

This measure, revealed IndieWire, seeks to eliminate programs and movies that do not work on the streaming service but have the opportunity to be partially canceled.

“Content costs may be amortized, or assigned a cost that an entity recognizes over several years, over the expected useful life of the program or movie. If there are years left on that timeline, a business can remove that asset from the distribution and use its remaining cost balance to offset taxable income elsewhere. (There’s also a nonmonetary advantage to cleaning house, according to our source: The service is more likely not to overwhelm subscribers with content choices.)”, a source told the aforementioned portal.

Among the original films removed from HBO are: “Moonshot” starring Lana Condor and Cole Sprouse, “Superintelligence” by Melissa McCarthy and Ben Falcone, “An American Pickle” by Seth Rogen, Robert Zemeckis’s new version of “the witches” starring Anne Hathaway. The movie “Lockdown” Hathaway’s was also eliminated. The latest victims areCharm City Kings” and the new version never released of “House Party”, starring LeBron James. The list could increase.

More changes

On the other hand, Grace Randolph, an American film reporter and critic, said that Warner Bros Discovery will merge all the content of Warner and Discovery but it will have neither HBO nor Discovery as a stand-alone service. He also let it be known that layoffs of 70% of the HBO Max staff could come.

Randolp, who is known for being insiders, said in another tweet: “#HBOMax originals if they stay I guess they will become #HBO shows. The commercial brilliance of this is that Discovery cares about Discovery, so they build their service, even if at a later date they decide to sell WB.”

As in any business, to work you have to have capital and if that means saving costs and cutting budgets, it is done. And as we mentioned above, with the purchase of Warner, Discovery took on a debt of 43 million dollars, and Zaslav he promised savings of 3 billion, which explains his current measures.

So far, a large number of workers could be laid off and go the way of a handful of outgoing high-profile executives like Warner Bros. CEO Ann Sarnoff and Warner Bros. president of Global Kids, Young Adults. and Classic, Tom Ascheim, who were fired within the first three months of Discovery-WarnerMedia’s birth.

Most of the cuts are said to start in August and end in mid-November. Likewise, thousands of workers are expected to be affected, as the company faces a “bigger mess” than initially expected.

The moves and cuts have aimed to cut people and budget to the sector dedicated to non-fiction.

“The move will result in the destruction of HBO Max, significant layoffs for its executives and staff to minimize layoffs at HBO and a combined streaming service with Discovery+ that features stricter separation of lines between scripted and non-scripted content operations”, reports The Wrap in its most recent edition.

Right now HBO Max has a growing list of ‘realites’, competition and lifestyle like: “Selena + Chef”, “FBoy Island”, “Legendary”, “The Great Pottery Throw Down”, “Sweet Life : Los Angeles” and Dan Levy’s upcoming “The Big Brunch,” among others.

The Wrap report indicates that initially, hbo max will stop producing scripted content such as series and movies and will only be dedicated to the creation of programs ‘reality’ and ‘talk shows’. Likewise, HBO will be in charge of the production of more specialized content, and it is believed that its streaming platform will be absorbed by Discovery+.

“I think all the people from HBO Max will go away and it will be all the people from Discovery, and they’ll just rename it. I don’t know what else they’re going to do”, declared for Variety a worker who deals with unscripted content. “David Zaslav obviously has a team he totally trusts, that’s crystal clear. And I think HBO Max has done well, in part because of the pandemic, but for them to name HBO Max, which is essentially the Warner Bros. catalog, HBO Max felt that it was clinging to the coattails of HBO, that it was distinguished and established a name for itself long ago. So my only question is, will HBO live inside that new structure or outside of it?

Another source told the same outlet that HBO and HBO Max say they do not yet know the plans and continue to operate with uncertainty about how much longer they will be in business. But as of today, the company’s line is that the unscripted departments of HBO and HBO Max are alive, though they’re clearly not doing well.

Other rumors point to the growth that Discovery Plus will have, since it was Discovery that acquired WarnerMedia.

On August 4, Warner Bros Discovery Inc (WBD.O) is expected to discuss new streaming strategy for the merged company when it reports second-quarter earnings, four sources familiar with the plans told Reuters.

The company is likely to provide additional details about its plans to bring together the HBO Max service’s collection of dramas, comedies and movies with Discovery+’s reality shows. The price and name of the new streaming service are still being discussed internally.

Warner Bros Discovery is also considering free ad-supported services that would exist alongside its subscription service, although no announcement is planned. One source said that among the ideas being discussed is a service based on Warner Bros’ library of classic movies, which currently attracts little attention within HBO Max.

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