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State of the Screens

Will Warner Bros Discover a Whole New World?

By March 3, 2022No Comments

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Discovery+ subscribers (YoY growth):
1) 2020 – 5.2M
2) 2021 – 22.0M (↑ 323%)

Big news: Discovery and WarnerMedia may complete their merger by the end of this quarter.

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Big question #1: What will WarnerBros. Discovery cost?

Potential subscription tiers for WarnerBros. Discovery:
1) Free w/ ads
2) Lower cost subscription w/ some ads
3) Higher cost subscription with no ads

Quote from David Zaslav CEO @ Discovery:
“Our objective is to reach everybody.  There’s a load of people that will never pay for television, but they can go to and view this content and that’ll be advertiser-supported.  I think there are a number of players that are very tied to this idea of subscription-only.”

Flashback: Welcome To The Jungle: Discovery Betting On New Streaming Service

Monthly ARPU for Discovery:
1) Discovery+ (ad-supported) – $9
2) Discovery+ (ad-free) – $7
3) Discovery linear (ad-supported) – $7

FYI: The combined company will generate ≈ $10B in linear/streaming ad revenue.

Big question #2: Will WarnerBros Discovery lead the spending race for content?

Quick answer: No.

Quote from David Zaslav CEO @ Discovery:
“Our goal is to compete with the leading streaming services, not to win the spending war.”

Estimated U.S. content spend for WarnerBros. Discovery (YoY growth) according to Wells Fargo:
1) 2019 – $19.8B
2)
2020 – $18.0B ( 9%)
3) 2021 – $20.7B (↑ 15%)
4) 
2022P – $22.4B (↑ 8%)
5)
2023P – $24.0B (↑ 7%)
6) 2024P – $25.2B (↑ 5%)
7) 2025P – $26.2B (↑ 4%)

Share of series demand according to Parrot Analytics:
1) Disney – 20%
2) WarnerBros. Discovery – 19%
3) Viacom – 13%
4) NBCUniversal – 11%
5) Netflix – 8%
6) Other – 29%

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Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.