Watch HBO shows for free? Warner Bros. Discovery Exploring FAST Option

Warner Bros. Discovery is targeting a FAST — and tells investors the company is considering launching a free, ad-supported TV service (FAST) populated with content from its portfolio of brands to complement its premium subscription business.

The first strategic priority on the house’s streaming side is to merge HBO Max and Discovery+ into a single platform. That’s set to debut in the U.S. in summer 2023, the company said Thursday, though WBD didn’t reveal what it would be called or what it would cost.

Warner Bros. Discovery chief David Zaslav said on the second-quarter earnings call that once the integrated subscription VOD service “is firmly established in the market, we see real potential and are exploring the possibility of a FAST or free.” ad-supported streaming [TV]an offering that would give consumers who don’t want to pay a subscription fee access to great library content.” The potential FAST service would also serve as an “entry point” to sell consumers the paid HBO Max-Discovery+ combo, he added .

It is possible that such FAST service will include some HBO programming. But to be clear, you wouldn’t get something like the full complement of the HBO original series for free.

The content of Warner Bros. Discovery’s potential FAST service “would be vastly different than the content that will be included in our premium SVOD offering,” said JB Perette, President and CEO of Streaming and Gaming at Warner Bros. Discovery, to analysts. “There’s a lot of content that wouldn’t necessarily make sense in a premium product, but that could make sense in a free, ad-supported tier of streaming,” he added, saying that WBD has a library of more than 100,000 episodes in in its combined portfolio .

Perette said Warner Bros. Discovery will provide more details on its potential FAST plans at an investor day scheduled for late 2022.

In the US, players in the fast-growing FAST segment include Paramount’s Pluto TV, Fox’s Tubi, Amazon’s Freevee (formerly IMDb TV) and Roku Channel.

Warner Bros. Discovery, formed by Discovery’s acquisition of WarnerMedia from AT&T, remains in red ink on the streaming front as it continues to invest money in HBO Max and Discovery+.

In the second quarter, the streaming business’ revenue growth slowed as losses mounted. WBD’s direct-to-consumer segment generated revenue of $2.41 billion during the period, up 2.5% year over year, but down from $2.52 billion in the first quarter Pro forma basis. Operating loss for the DTC business increased to $1.53 billion (including $472 million for “restructuring and other charges”) last quarter, nearly double the pro forma loss of $786 million in the second quarter of 2021.

Overall, the company added 1.7 million subscribers to HBO, HBO Max and Discovery+, up to 92.1 million at the end of June. But in the US and Canada, it sequentially lost 300,000 subscribers across those services.

Perette said the company expects losses for the streaming segment to peak in 2022 “as we do the heavy lifting in terms of technology, staffing and integration ahead of the planned relaunch starting next summer.”

In the US, WBD is aiming for the US DTC segment to become profitable in 2024. By 2025, Warner Bros. Discovery expects to have 130 million streaming subscribers worldwide and its direct-to-consumer business to generate $1 billion in earnings before interest, taxes, depreciation and amortization (EBITDA), Perette said.

Pictured above: HBO’s “Succession” Watch HBO shows for free? Warner Bros. Discovery Exploring FAST Option

Charles Jones

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