Understanding the HBO Discovery Merger: Will Scripted Shows Remain?

The recent merger between HBO and Discovery has raised concerns among viewers, especially those invested in specific scripted shows. Many are worried that new management might focus entirely on reality programming, potentially canceling beloved shows like Euphoria, Peacemaker, and HotD. However, the truth is more nuanced. Warner Bros. Discovery has a vested interest in maintaining its scripted programming library.

Why Warner Bros. Discovery Won't Abandon Scripted Shows

Warner Bros. Discovery isn't motivated by altruism; it's a business. The company owns a vast library of scripted content, including shows like Euphoria, Peacemaker, and HotD. Cancelling these shows or reallocating resources to reality TV would not be in their best interests.

Simplified, Warner Bros. Discovery’s business model is based on generating revenue from various media sources, including streaming, broadcast, and cable networks. By diversifying their content portfolio, they can ensure a steady stream of income. Breaking away from scripted programming entirely would be a strategic blunder, given the broad appeal and long-standing tradition of such shows in the entertainment industry.

Current Challenges and the Merger's Impact

Recently, there has been a wave of cancellations and relocations of shows and movies from HBO Max. This isn't a surprise; it's often part of the transitional phase when new management takes over. However, it's important to understand that these cancellations are driven by financial considerations rather than a shift in strategic focus.

For instance, the cancellation of the film Batgirl was due to financial feasibility. With a budget of $90 million, the cost of marketing for a theatrical release would have doubled the film's expenses. Additionally, the company was facing a significant debt burden, inheriting $15 billion in debt. Cancellation and offloading the film was a strategic decision to minimize financial losses.

The Decision to Drop CNN

A more clear-cut case is the decision to drop the CNN app. Former management and new management had differing views on the viability of CNN as a standalone app. The launch was underwhelming, and the cost of operating it annually was $500 million. Dropping CNN and merging it with Discovery was a cost-cutting measure that made financial sense.

The merger also meant that the new management could reallocate content more efficiently. CNN's content will now be integrated into Discovery, potentially reaching a wider audience through multiple platforms.

Expectations for the Future

It's important to note that while cancellations might occur, it's unlikely that Warner Bros. Discovery will abandon its scripted shows entirely. The merger was intended to create a more competitive media landscape, leveraging the strengths of each company's content libraries. Maintaining and expanding scripted programming is a vital part of that strategy.

The consolidation of HBO Max and Discovery into a single app next summer is a significant step in this direction. This move aims to optimize user experience and content accessibility, ensuring that audiences have a seamless experience across different types of programming.

While there will undoubtedly be shifts in programming and some cancellations, the overall strategy remains clear: Warner Bros. Discovery is committed to maintaining a robust slate of scripted shows alongside reality programming. The merger is a tool to enhance this strategy, making content more accessible and competitive in the current media landscape.

In conclusion, the merger between HBO and Discovery is a strategic move to optimize financial performance and content offerings. While there might be some initial disruptions, the long-term plan is to maintain a diverse and dynamic content portfolio that includes both scripted and reality programming.