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HBO remains Warner Bros. Discovery’s crown jewel, as Zaslav noted in the company’s most recent earnings call. He called out the power of HBO’s Sunday night slot alongside Warner’s global reach in cinemas: The 9 p.m. hour remains one of the last bastions of scripted appointment TV, even after all the changes in the media industry in recent years. 

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Long-waited new episodes of highly popular hit shows like “Game of Thrones,” “House of the Dragon,” “Succession” and most recently “The Last of Us” have driven this strategy, highlighting how it depends on the company’s ability to keep producing immensely popular original content.

Demand for original content drives subscription growth, but library content is key for customer retention. In both aspects, WBD’s primary streaming service, HBO Max, benefits heavily from the volume of shows and movies produced by Warner Bros., HBO and the other properties that fall under the WBD corporate umbrella. In 2022, HBO Max boasted the most in-demand movie catalog from the major SVOD services. It also amassed the third-largest audience demand share for total catalog (TV and movies combined), with a very small gap separating the service from second place Hulu.

The chart below sheds additional light on the anticipated HBO Max/Discovery+ merger. The soon-to-launch combo platform would have generated 19.4% of the total catalog demand for SVOD platforms last year, leapfrogging Netflix as the top service in the U.S. market. Crucially, Discovery+ would bolster its series catalog, bringing its demand mix closer to the series-heavy look of Netflix and Hulu.

Besides boosting its demand share, Discovery+ can also provide HBO Max with more all-encompassing demographic coverage. Discovery+-exclusive shows tend to over-index with older female audiences, driven largely by the number of titles from Discovery’s HGTV, Food Network and Animal Planet networks. As evidenced in the chart below, there is very little overlap between the core audience of both services. A combination of both catalogs results in a “four-quadrant” combined streaming service, which is much more attractive across the broader demographic spectrum.

Zaslav recently confirmed that Discovery+ will keep running as a standalone service after the combined platform is launched. That strategy makes more sense when we look at the demographic data for both platforms. The Discovery+ audience would likely not support being forced onto a more comprehensive but more expensive service, even though the combination will be largely beneficial to HBO Max. 

Daniel Quinaud is a senior data analyst at Parrot Analytics, a WrapPRO partner. For more from Parrot Analytics, visit the Data and Analysis Hub.

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