The Current Debate: The HBO-Discovery Merger and the Future of Streaming

As new films get canceled and others axed from HBO Max’s library, the streamer’s merger with Discovery is rippling in concerning ways.
Leonardo Goi

Contrary to the apocalyptic suggestions that spread like wildfires earlier this month, HBO Max is here to stay. On August 4, Warner Bros. Discovery CEO David Zaslav announced the streamer will merge with Discovery+ into a single platform expected to launch around summer 2023, as part of a plan to hit 130 million paying subscribers by 2025. The rumors that circulated on the eve of that earnings call may have been histrionic—was HBO Max going to be folded into Discovery+? Would that mean the end of all its scripted originals?

The panic was understandable. Earlier that week, Warner Bros. Discovery had pulled the plug on Batgirl, a finished 90-million-dollar feature starring Leslie Grace in the title role and Michael Keaton as the Caped Crusader. Long before Batgirl’s shelving, other HBO Max exclusives had been quietly removed from its slate (over at Entertainment Weekly, Jessica Wang has compiled a list of all HBO Max originals susceptible to cancellation following news of the merger). And Zaslav’s promise to achieve $3 billion in cost savings is likely to include significant layoffs, a suspicion confirmed by the firing of 70 HBO Max staff members just last week.

How exactly the joint platform will evolve remains uncertain (we’re yet to know what it’ll be called, for one, or how much subscriptions will cost). But two things have been made abundantly clear, Chris Lee argues at Vulture:

One: Warner Bros. Discovery plans to take the most un-Netflix-like approach possible, doubling down on quality content and re-embracing the theatrical distribution model for films as a revenue driver. Two: That pivot back to theatrical is an implicit repudiation of recently deposed WarnerMedia CEO Jason Kilar’s by-any-means-necessary bid to jam subscriptions to HBO Max, specifically his controversial choice to dump every first-run title day-and-date on the streamer and infuriate a wide swath of the entertainment industry.

Seismic as it may strike, the studio’s pivot back to theatrical should come as nothing surprising. Over at Variety, Kaare Eriksen praises Sony Pictures’ own business model as a success story that might explain Warners’ move. When Sony’s Spider-Man: No Way Home hit theaters in December 2021, it went on to become the top-earning film of the pandemic. But beyond theaters, “Spider-Man helped to significantly lift home entertainment revenue for [the studio’s] motion picture business in the first half of 2022,” when Sony had a more muted presence at the box office, showing that “the prioritization of VOD can be a lucrative way to offset slower months at cinemas.”

In other words, the relationship between streaming and theatrical releases, as Chris Lindahl observes at IndieWire, can be symbiotic. Theatrical releases “can help attract reviews, while platform releases can help steadily build word-of-mouth before studios take on the expense of going wider,” which is all the more crucial in our content-flooded zeitgeist, where “a theatrical release can help a movie stand out in a sea of streaming-app tiles.”

This renewed commitment to the theatrical experience is surely something to rejoice; in an ideal world, the move could give original concepts and new voices a chance to find a home on screens both big and small. But as Charles Bramesco helpfully notes at The Guardian, the new execs’ myopic understanding of what the two streamers stand for—and what they could achieve combined—spells doubts over the joint venture.  

Warners is far from the first studio to step out with the daring strategy of releasing only good movies instead of bad ones, an overhaul more easier said than put into practice. The tone of the recent earnings call erred on the side of corporate inanity, particularly in how the C-suite understands the utility and future of HBO Max. One slideshow card summarily circulated as a meme on social media broke down the presumed appeal of the service, as contrasted with Discovery Plus. Whereas HBO Max is “male skew”, “lean in” and “home of fandoms”; Discovery Plus is “female skew”, “lean back” and “home of genredoms”. The reasoning that “HBO equals 'Game of Thrones,' which dudes like” versus “Discovery Plus equals 'Property Brothers,' beloved of women” betrays a major misapprehension about the broader potential for these services, which could be hubs for a wider sampling of material catering to omnivorous tastes.

All of this speaks to larger dilemmas around the compatibility between the two platforms. With its emphasis on unscripted content (home improvement shows, nature docs, and a vast array of reality TV programs), Discovery couldn’t be farther away in scope and philosophy from its sister streamer. “The idea of merging WarnerMedia and Discovery into one company,” Jesse Schedeen writes at IGN, “has always seemed a bit strange. How can two companies with such opposite approaches to content fuse into a cohesive whole? Can Zaslav embrace the need for expensive prestige television alongside the familiar Discovery fare?” The risk, as Andrew R. Chow contends at Time, is to see HBO sandwiched into a strange sort of mini-cable-TV bundle.  

The merging of HBO Max and Discovery+, two specialty platforms, shows perhaps that the one-lane approach is not viable for major corporations. Despite a recent study showing that HBO Max has the highest level of satisfaction among customers, WBD decided that they could make more money by pairing it with "Shark Week." It seems that with every new earnings call, the certainty that we’re headed back toward a cable package-like world increases. 

If the prospect of reverting to a big-tent approach may strike as a short-sighted misstep, the ongoing removal of titles from HBO Max is far more troubling. Not only does HBO boast “easily the best library of classic shows and movies AND daring originals that never feel like they’re made by algorithms,” as entertainment writer Eric Francisco tweeted on the eve of Zaslav’s announcement, Batgirl’s inglorious fate,  Peter Bradshaw warns at The Guardian, “can happen to even the most well-regarded and prestigious-seeming indie films.” This is why the film’s shelving is so concerning. To borrow again from Vulture’s Chris Lee, sources have claimed the studio “preferred taking a hefty tax write-down on the negative cost of the film rather than incur additional costs for marketing.” As a Hollywood strategist told Lee, “the decision to not dump Batgirl onto HBO Max may have been partially dictated by a desire to avoid coughing up stars’ residual pay or cash outlays that would only come from streaming.” Which might account for the removal of other titles from the platform (including 2020’s The Witches).

What’s most worrying, Erin Brady echoes at SlashFilm, is that “the removal of movies specifically catered for streaming services sets a dangerous precedent regarding the stability of streaming libraries.”

Of course, it's important to understand that the majority of movies are passed around from streamer to streamer based on their distribution contracts. However, what happens to the movies when a platform just goes offline? Some movies will be easier to find than others, but harder-to-find titles and streaming exclusives have the potential to fall through the cracks, perhaps even slipping into inaccessible obscurity.

“Owning the content that really resonates with people is much more important than just having a lot of content,” David Zaslav told investors on August 4. But if the platform can remove titles at will, how could creatives be reassured their projects won’t be next on the chopping block? It bears remembering that, as former Warner Bros CEO Kilar announced the hybrid model back in 2020, Denis Villeneuve and Christopher Nolan publicly rebuked the studio, and the latter ended up severing his ties with WB to make Oppenheimer at Universal. Whether others will join the exodus remains to be seen, but it’s easy to see why filmmakers may look at Batgirl’s debacle in sheer horror, a feeling Dickinson’s creator Alena Smith sponged up well on Twitter. Nothing digital is ever owned; in the absence of physical copies, a project canceled (or shelved) is a project lost forever.

Could that be the merger’s most significant lesson? The mass hysteria over the loss of HBO shows and films doubles as a reminder of the need to reconsider practices that streaming has made all but obsolete—such as purchasing and collecting Blu-rays, DVDs, or VHS tapes. Sure, HBO Max may not be on the brink of collapse, but as Alison Herman perceptively notes at The Ringer, “The very platforms encouraging us to abandon physical media are now proving its necessity as a hedge against corporate whims.” HBO is still among us, but so are the doubts surrounding its evolution and our own viewing habits. Amid all the uncertainty, the merger’s fallout may serve as a wake-up call for viewers and creatives alike—an invitation to question the kind of “access” and “permanence” streamers have long boasted, and to reconsider the sense of ownership we seek. 

The Current Debate is a column that connects the dots between great writing about a topic in the wider film conversation.

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