Netflix believes one plus one will equal three in terms of HBO joining its portfolio.
Co-CEO Greg Peters said as much throughout a 45-minute conference call with Wall Street analysts about the $82.7 billion acquisition of Warner Bros. Discovery’s studios-and-streaming division.
“It’s quite early to get into specifics,” Peters said about how exactly HBO will be combined with Netflix.
He also acknowledged there is a “high overlap of subscribers” to both Netflix and HBO. But the deal “gives us a lot of levers to think about in terms of packaging,” he said. “We’ve also seen that some of these bundles and models, if you construct them correctly, can have all sorts of benefits with retention and engagement.”
Peters said distribution and product changes would be two ways to realize added value. The combination of Warner and Netflix has puzzled industry observers and investors given that Netflix’s home screen, especially after a recent revamp, is not especially hospitable to the kind of branded tiles that are defining features of Disney+ and other streaming services.
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Peters also encouraged analysts to think about the “many, many” Netflix subscribers globally who do not currently get HBO Max, which has only recently reached key international territories.
That untapped population :are not getting any value from the HBO Max titles and Warner titles,” he said. “We think there’s a real opportunity in figuring out how we bring those titles in the right way, through some combination of plans, tiering etc. to unlock the value in those assets.”
HBO’s brand and programming are “clearly valued,” Peters said. “We believe that actually having more room to figure out how we allocate, you know, that content across a range of offerings, how we think about bringing that into our plans, uh, of offering today, will actually unlock value that isn’t being unlocked today. And one of the most sort of obvious, I think, things to think about here is that we believe we’ve got the best tool for connecting incredible stories with people around the world, and we think actually bringing more of that Warner Bros. content into that tool, if you will, will just unlock value in and of itself.”