As HBO Max and Discovery+ Eye a Merger: Scale vs. Brand Identity

Warner Bros. Discovery is figuring out if bigger and wider really is better when it comes to streaming. Since acquiring the merged company in April, CEO David Zaslav has made his vision of a global platform clear, and with the company’s latest earnings release this week, Wall Street’s anticipation for details on a paired HBO Max and Discovery+ is growing.

This would allow people who signed up for “Barry,” “Succession,” and “Last Week Tonight With John Oliver” to join “Naked and Afraid” and hundreds of hours of exciting Food Network personality Guy Fieri as the host getting fed up of supermarket contests and eating fried chicken steak or meatloaf in trendy restaurants.

Do the two go together? The names HBO and Discovery “mean different things to different people,” says Allen Adamson, managing partner of Metaforce, a branding consultancy. And that could present a challenge, he adds, when it comes to selling potential subscribers for a combined service: “The broader the brand, the more things you’re trying to represent.” Warner Bros. Discovery declined, executives to make available for comments.

The mega studio isn’t the only one grappling with the best way to showcase offerings in the highly competitive streaming space.

Disney+, for example, has earned a reputation for offering family-friendly plans and programming that parents and kids can watch together. The service has even gone so far as to tell advertisers that it will not accept alcohol or political campaign ads when it launches a commercially supported tier later this year. But that hasn’t stopped Disney from adding adult superhero fare like Deadpool or Jessica Jones to its library. In the documentary world, observers raised eyebrows when, following its Sundance debut, Disney bought Mija, an immigrant story that explores the lives of undocumented families; it will debut on Mouse House’s streaming service this month, where it will air alongside shows like Doogie Kamealoha, MD and Ms. Wonder.”

Netflix has also – until recently – succeeded by offering something for everyone. The service, of course, has series for children and young people, but is also preparing to launch the Marilyn Monroe biopic “Blonde”, which is expected to carry an NC-17 rating. Suppressing a selection doesn’t seem like an option. A former subscriber (this reporter) recently received an email pitch from the company promoting its “thousands of new TV shows and movies.”

Veteran marketing executives have long advocated the idea of ​​defining a brand’s core audience and tracking them with all the data science and media targeting you can muster. And indeed, some streamers have identified a core ingredient. Fox Nation has been working to provide a range of content for conservatives. The now defunct CNN+ was initially looking for “superfans” of the long-time news agency who were interested in topics such as business, food and travel.

But many of the services don’t follow this strategy. Research from Known, a marketing agency that has worked on several big launches for streamers, shows that consumers tend to buy “one of the long-standing offerings in the space and then probably one and maybe two, but definitely not three other things.” says Kern Schireson, CEO of Known.

He likens the upcoming challenge for streaming outlets to old efforts by grocery or cereal companies to sell a “variety” of flavors. “You know you need vanilla. You probably need peach. What are the other two flavors I need?” asks Schireson, persuading people to buy.

Netflix, Warner Bros. Discovery, Disney and Co. can pull different levers than advertisers in the past. The more customers the streamers attract, the more information they generate about what people really like – which helps them figure out what they need to produce to get additional customers to sign up to watch.

“If you and I both subscribe to Netflix, we probably subscribe for very different reasons. The content you enjoy on Netflix is ​​probably different than the content I enjoy,” said Michael Smith, professor of information technology and marketing at Carnegie Mellon University. “Brand is important for attracting consumers, but what I think is important for retaining customers is the ability to use data to direct customers to exactly the right content.”

That doesn’t mean streamers are allowed to cram all sorts of different formats under one roof. For example, it remains to be seen whether Warner Bros. Discovery will require Discovery+ or HBO Max subscribers to pay more for the privilege of accessing a combined content offering that some might not want. And despite the availability of robust parental controls, Disney+ aims to be a place where they’re not required for many parents.

While consumers have certain expectations from names like Disney and HBO, Adamson, the consultant, says what they really want is a good new show to watch. “They’re looking for a ‘Marvelous Mrs. Maisel,’ not an Amazon Prime show,” he says.

Bigger might be better for streamers — at least for now. Even as they try to grow, broadband sockets can’t lose their delicate touch. They still need to improve their algorithms so subscribers jump to something new instead of switching to a competitor. In other words, the folks behind Netflix, HBO Max, and Hulu really need to work up a sweat on the little things, too. As HBO Max and Discovery+ Eye a Merger: Scale vs. Brand Identity

Charles Jones

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