Despite consumers’ frustrations with the fragmented streaming landscape, Warner Bros. Discovery CEO David Zaslav believes there’s a “real opportunity” to raise prices in the future.
“I think the pricing across the board, not only is there too many players, but in order to stay alive, a lot of the players have just decided to drop price aggressively. Consumers in America were paying twice as much 10 years ago for content. So people were spending on average $55 for content 10 years ago. And the amount of content they’re getting, the spend is up like 10 or 12 fold, so they’re paying dramatically less,” he said during an investor conference hosted by Goldman Sachs on Wednesday. “We want a good deal for consumers, but I think over time, there’s real opportunity, particularly for us in that quality area, to raise prices.”
Zaslav’s comments came as both Peacock and Apple TV+ recently raised their prices by $3 per month. Apple TV+ now charges $13.99 per month for its plan in the U.S., while Peacock Premium and Premium Plus cost $10.99 and $16.99 per month, respectively. The cost of an HBO Max subscription ranges from as low as $9.99 per month for its Basic with Ads plan to $20.99 per month for its Premium ad-free plan.
The executive predicted that consumers will see an increase in the amount of available bundle offerings. He noted HBO Max’s bundle with Disney+ launched earlier this year has resulted in “extremely low” churn.
“Usage is much higher for both of us, and overall consumer satisfaction with the product is much higher. So I think you’re going to see a lot more of that,” he said.
While WBD has also said it would follow Netflix and Disney+ in cracking down on password sharing, Zaslav admitted the company has been less aggressive on the effort because “people are really starting to love HBO Max.”
“We want them to fall in love with our content, with our series, with the differentiated offering outside of the US,” he said. “It’s a little tricky with the password sharing. We’re going to begin to push on that.”
The company previously warned that it would be more direct in its paid sharing efforts starting in September, with fixed messaging requiring customers to register for access.
Warner is aiming for at least 150 million streaming subscribers by the end of 2026, with profitability for the segment on track to exceed $1.3 billion in 2025.
When asked about Warner Bros. Discovery’s upcoming split of its linear network and studios & streaming businesses, Zaslav reiterated that everything remains on track for the separation to occur in the second quarter of 2026.
“We expect sometime in April that the companies will be split. There’s no approvals required, and the company is outperforming pretty aggressively, which I think will will help us,” he said. “We’ll have more debt that we’ll pay down before we go and we’re working hard now on having the trajectory of the businesses being stronger.”
He noted that a new CNN product will launch within the next six weeks.
“We got two more products out of CNN that take advantage of CNN as the globally most trusted vehicle to get your news,” he said. “Pretty soon, within the next couple of months, you’ll be able to get CNN for a price. It’ll start first here in the US, but you’ll be able to get it everywhere in the world for a price.”
WBD chief financial officer Gunnar Wiedenfels, who will lead the spun off linear networks business Discovery Global as CEO, has also said the company would launch a TNT Sports app that can be bundled with Discovery+ or HBO Max.
“They’ll be able to really focus on taking advantage of their assets, rebuilding them for the future, but also maybe buying some low multiple assets that could further solidify their ability to generate a lot of free cash flow along into the future,” Zaslav said.
