Warner Bros Discovery (WBD.O) is taking bundling to the max. The $27 billion entertainment company wants to add live sports from the National Basketball Association and Major League Baseball to its streaming service, free for a limited time, according to Bloomberg. Boss David Zaslav said on Wednesday at a Goldman Sachs conference that CNN will be available too. His business is starting to look like basic cable.
Warner Bros unveiled its new streaming service Max, which includes HBO, in April. The industry is packed with competitors, and at $16 a month, Max is already one of the most expensive. Added offerings makes some sense to differentiate. In theory, once hooked, it’s harder to disengage.
The problem is that model has already failed. Cable firm Charter Communications (CHTR.O) is currently battling with Walt Disney (DIS.N) because sports network ESPN, one of the most expensive channels to distribute, is included in pay packages even if the customer doesn’t want it. The problem with wrapping pricing together is that consumers are wise enough to know that nothing in life – especially expensive sports programming – is free. Eventually Max’s price will go up more.
Charter said the cable industry has lost 25 million customers in five years, or a quarter of the base, because of highly priced bundles. Streaming services looking to recreate the pay-TV ecosystem may end up in a similar cycle. (By Jennifer Saba)
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