Max to Grow by 6M Subscribers This Quarter, David Zaslav Says

In need of a win following the loss of its NBA rights package, Warner Bros. Discovery aims to shore up its linear pay TV business with a multiyear agreement with Charter Communications that begins to rebuild what used to be called the cable bundle.

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The deal will see a tier of Max, including HBO content and Discovery+, be made available to Charter’s Spectrum TV Select packages without an extra charge for customers. It marks the first time that HBO programming will be available in a standard cable bundle, and not sold as an add-on.

The agreement was announced shortly before David Zaslav spoke at a Goldman Sachs conference on Thursday, where the Warners CEO said flagship streamer Max was poised to grow by 6 million subscribers in its latest quarter and that the service needs to grow globally. In August, the company said its streaming subscribers hit 103.3 million at the end of its second quarter, up 3.6 million subs.

“I’ve been talking about bundling for two years,” Zaslav said, touting the company’s plans for tie-ups including the Disney+, Hulu and Max bundle as well as international pacts for packages. The CEO said that bundles help reduce churn (when subscribers cancel after just watching, say, one HBO show) and are a better overall consumer experience and can help increase average revenue per user.

“I bet the churn is lower, I know the marketing is a lot lower — because we’re doing it together,” Zaslav said of the Disney+, Hulu and Max bundle deal. “If things were going great for consumers, and if things were going great for the media players, then we wouldn’t be doing these creative deals that we’re doing.”

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“When you put the TV set on, you have 12 apps, and you’re googling, ‘Where is it?'” he elaborated.

WBD will disclose its third-quarter earnings on Nov. 7. Year-to-date its stock has been down 36 percent and has hit lows since the company was formed two and a half years ago after the spinoff of Warner Bros. assets from AT&T to Discovery with Zaslav at the helm.

The CEO also had a grim forecast for the flotilla of streaming platform startups that hoped to win over subscribers but now face headwinds. “I believe it’s very hard — next to impossible — to have a sustainable growth streaming business if you’re not global,” Zaslav noted. “You’re going to see a lot of people throwing in the white flag or saying, ‘Let’s do this differently’ or ‘Let’s do this together.'”

He added that he thinks in this streaming shakeout, there may only be five or six major players left standing. Zaslav said, “There’ll be consolidation with people buying each other. There’ll be consolidation of people saying, ‘I’ve had enough,’ and getting out.”

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