WBD’s JB Perrette presents maximum growth plans: Europe and package

Warner Bros. Discovery’s Max was supposed to become a Netflix killer when it launched a year ago. It combined HBO Max’s prestige originals with Discovery+’s reality TV fare to capture viewers as they move away from WBD’s traditional TV business.

However, after a mixed first year, WBD believes the second year will be important for growth.

Starting May 21, it will launch Max in 29 European countries, following a launch in Latin America in February. It’s planning to crack down on password sharing, like Netflix and Disney+ before it, as it launches a new bundle with Disney+ and Hulu and a top-tier slate, including new seasons of “House of the Dragon” and ” “The White.” Lotus” and a Batman spin-off, “The Penguin.”

Max faces an uphill battle. Overall, it hasn’t surpassed the top five video platforms, capturing just 1.2% of U.S. viewing share in April, behind Netflix and many others, according to Nielsen. Outside the US, Max is in less than half of the markets its competitors target. So there is only one way to go.

JB Perrette, CEO and president of global streaming and gaming at WBD, explained in an interview how he thinks Max can become one of the top three streaming destinations and what streamers like Max owe Netflix, even as they’ve entered in the red when trying. to match the company’s spending on television shows and movies.

Perrette acknowledged that Max will “come later to the party” with its overseas release. Still, WBD executives hope growth will come from making the app reach a broader audience and at different price points. To catch up, WBD is also partnering with a larger number of distributors, including Vodafone, Amazon and Orange. It also plans to capitalize on being the exclusive European home for the Paris Olympics later this summer.

Given its low penetration, it’s possible Max could add tens of millions of subscribers, he said. Max had 99.6 million subscribers in the first quarter.

Next: Crackdown on password sharing and bundling

WBD also has a crackdown on password sharing to add more subscribers. The plan, which will begin this year, follows the example of Netflix.

“It’s great for all of us in the industry that Netflix continues to grow its share, proving that there is a growing and scalable audience of people who are willing to pay for a premium on-demand subscription service,” Perrette said. “They’ve done a lot to pave the way: fighting password sharing, training the consumer to think they can get one account per household. There’s a lot we can take advantage of.”

However, Perrette insisted that Max is “not copying anyone.”

“Netflix has done a lot of wonderful things and obviously we’re following that lead, but we would have gotten to that at some point,” he said.

WBD executives hope the crackdown will encourage people to subscribe to the three-in-one package of Max, Disney+ and its sister app, Hulu.

The bet on the package, which is expected to launch in the US this summer, is that even if WBD and Disney have to sell it at a discount, the amount they save by reducing mass sales will make up for it.

Ampere Analysis data supports the concept. While the overlap between Netflix and Disney+ is high, about half of Disney+ subscribers do not subscribe to Max, and vice versa, so each has the opportunity to significantly grow their audience.

For years, media companies spent a lot of money trying to compete with Netflix until Netflix hit a slump, causing the media’s stock to plummet and casting doubt on the profit potential of streaming.

Perrette said the industry’s adoption of bundling recognizes that high-quality entertainment is expensive and that people will only subscribe to a limited number of services.

“Costs are coming back down to where they should have been,” he said. “We’re finally at a point where people realize that you can’t keep making uneconomically viable things forever. Great stories are expensive to produce and consumers have to pay.”

Combining with Disney’s kid- and family-focused app will also allow WBD to focus more on adults than family fare (and presumably spend less on content).

“We remain very focused on families and adults,” Perrette said. “We still have big brands like Cartoon Network and Boomerang, and obviously, we’re doing things within the film business around family and kids IP, but on the streaming side, we wouldn’t triple that category.”