Last week HBO Max announced it was removing 36 series from its platform. This is in addition to several series that had been quietly removed in the past few weeks. These shows are the latest targets of CEO David Zaslav’s cuts which aim to deliver on his promise to Wall Street that he will find $3 billion in cost savings.
So what is the impact of these cuts to HBO Max’s near term value to subscribers? At a high level, removing these series will shave 2.1% off what the total demand for HBO Max’s catalog was in July. With only a 2.1% hit to the total demand for HBO Max’s catalog, its relative standing among competitors will not shift - still well behind the tight Hulu/Netflix race but ahead of Amazon Prime Video by a healthy enough margin.
To put that 2.1% number in perspective, in July Game of Thrones alone accounted for 2.1% of demand for all shows available on HBO Max. That’s a good benchmark for understanding how much audience attention these axed shows collectively make up. However, it would be a mistake to say that the impact of cutting this list of shows would be the same as losing Game of Thrones. GoT is a tentpole series for HBO Max. In other words, it is a strong draw for subscribers in its own right and serves as a hopping off point for discovering other content on the platform. The recent premiere of House of the Dragon also makes Game of Thrones critically important as an anchor for the expanding franchise on HBO Max.
None of the series being cut came close to the level of demand that would make them a tentpole for the platform. The most in-demand of the cut shows in July was Infinity Train which had 5.9 times the demand of the average series - a solid performance but not a broad enough appeal outside of its core fanbase to make it central to HBO Max’s offering. 148 other shows had higher demand than Infinity Train in July. That is a lot of content for subscribers to sift through before getting to Infinity Train.
Looking at where HBO Max decided to make the cuts, children’s content was a clear target. The kids shows getting the axe made up 6.6% of demand for all kids content on the platform, which isn’t huge but makes it the genre taking the largest hit. Also it’s worth noting that Discovery+ doesn’t really play in the kids space so it isn’t as if these cuts are preemptively eliminating similar content ahead of the platform merger next year. As HBO Max pumps the brakes in the streaming race for children’s attention, some of these series could be valuable pickups for another platform and in turn bring in revenue that will help Warner Bros. Discovery pay down its debt
The upcoming combination of the HBO Max and Discovery+ platforms will be a tricky balancing act for the company to pull off. Series removals like these in addition to combining two very different catalogs (which will presumably come with a price hike) create a shifting calculus for subscribers. Managing all these moving parts in a way that ultimately creates value for subscribers and entices them to pay more will be key in pulling this off next year. While these cuts may ultimately prove financially prudent for Warner Bros. Discovery, this is cold comfort for the creators and fans of these series if there’s a chance these shows don’t see the light of day again.
