Warner Bros. Discovery, Inc. (WBD) Earnings Call Transcript & Summary

The information provided during today's event contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties and on information available to Warner Bros. Discovery as of the date hereof. The company's actual results could differ materially from those stated or implied due to risks and uncertainties associated with its business, which include the risk factors disclosed in the company's filings with the U.S. Securities and Exchange Commission, including but not limited to the company's most recent annual report on Form 10-K and reports on Form 10-Q and Form 8-K. Forward-looking statements include statements regarding the company's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as anticipate, believe, could, continue, estimate, expect, intend, may, should, will and would or similar words. Forward-looking statements include, without limitation, statements regarding future financial and operating results, the company's plans, objectives, expectations and intentions and other statements that are not historical facts. Warner Bros. Discovery expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in the company's expectations with regards thereto or any change in events, conditions or circumstances on which any such statement is based. [Presentation]

Please welcome the Chief Executive Officer of Warner Bros. Discovery, David Zaslav.

Wow, what an exciting day for us. It's really a moment. So first, I want to welcome everyone, and thank you all for joining us on this very special day. And as you just saw, this year marks Warner Bros. 100th Anniversary, a century of storytelling. And we're here in Stage 14, which is still a working stage but it's steeped in history. Over 100 movies were filmed right here, including Casablanca, A Streetcar Named Desire in 1951, Gremlins in 1990 and we're still working. For those of us who work here on the lot, it's just magic. And in fact, it's really surreal for me, and it's very exciting for me to be -- to have this privilege to be on top of this incredible company, this extraordinary company, Warner Bros. Discovery. I did share with all the Warner Bros. Discovery employees, the strong sense of pride and obligation that we all feel, standing on the shoulders of the great business leaders that built this Warner Bros. Discovery, the Warner Bros. themselves and the great Steve Ross. It really is the stuff that dreams are made of. Last week, we gathered all of our employees around the world to celebrate this 100th anniversary. And I told everyone then this is a real moment for us. And it's not just a moment because it's the 100th anniversary of Warner Bros. But it's a moment in time. This is our time. This is our chance and everything is possible. Everything is possible, especially with the media assets, the storytelling IP and the amazing creative talent that we have here at Warner Bros. Discovery. I feel like for our company, this is our rendezvous with destiny. Last year was a year of coming together. A year of restructuring and now off we go all together to build Warner Bros. Discovery into the next century. And the real question for all of us is what stories are we going to tell. We are all only in these chair seats for a brief time. What stories are we going to tell that will define our legacy that we'll look back on years from now and say, we did that, we told those stories, and we want to tell great stories. Stories that not only entertain but also have an impact, an impact on how we see ourselves and how we see the world. And we want to share those stories with the broadest audience possible. And we have a real chance to do that here. Here, at the greatest storytelling company on earth. And our enhanced streaming service, that's what we're all here for. We're going to talk about it today. It's playing a starring role. And we named it Max. And as you'll see today, Max offers consumers something truly distinct and appealing. Max is the one to watch. It's the one to watch because it's the place every member of the household can go to see exactly what they want at any given time. From House of the Dragon and Succession to Property Brothers and Barefoot Contessa, from the Joker and Aquaman to Million Dollar Baby and Elvis. It's the one to watch because we have so many of the world's most iconic and global recognized franchises. It's our superpower, Superman, Batman, Wonder Woman, Game of Thrones, Lord of the Rings, Harry Potter and for kids, Sesame Street, Hanna-Barbera, Looney Tunes, just to name a few. We're so rich. You're going to hear all about many of those titles in the next hour. But it gives us a huge opportunity as a company. It's a real advantage. It's an advantage in attracting and nourishing consumers around the world. Max is the one to watch because we have the largest TV library in the world, thousands of shows, including shows that are loved everywhere like Friends, ER and Big Bang Theory. And we have a number of the biggest quality makers of content that will feed and grow Max in the years ahead. They're ours. Warner Bros Pictures, DC Studios, HBO and Warner Bros. Television, our global unscripted portfolio and multiple animation studios. Warner Bros. TV alone, Channing business. They're producing right now over 110 shows, huge hits on every platform, Peacemaker, All American, Abbott Elementary. We could go on and list all of them. Together, these studios allow us to control our own destiny and they give us long-term business optionality. We are this industry's biggest and most successful maker of content. We are not pickers. We are content makers. Max is the one to watch because it's easy to navigate. Curating is a key element with consumers, and it's an area where we have real strength. It's the one to watch because of the one-of-a-kind storytelling from HBO Max, which drives subscriber acquisition. And the comfort viewing of discovery+ which drives subscriber retention. Holding subs is as important as adding subs. And together, they pack a really powerful one-two punch. And we have 2 more vibrant parts of our Warner Bros. business that will be key to our long-term streaming strategy going forward. We're a global leader in sports and we're a global leader in news. And in a few months, we'll come back to you with details of our attack plan to use this important and differentiating live content to grow our streaming business even further. Finally, Max is one to watch because it's home to shows that have a supersized effect on people and culture. As you saw with The Last of Us, Euphoria, White Lotus and just last Sunday with Succession. New episodes air weekly and people everywhere are talking about what they saw. It streamings version of must-see TV with huge cultural impact, because it's a shared must-have experience. We couldn't be more excited about what we have in store for you today. I think it's going to be a great show, enjoy it, and I'll see everyone at the end. Thanks again for coming.

Thanks, David. So we're launching Max at an exciting moment and yet a time of transition for the streaming industry. Only 15 or so years into its existence, streaming has reached the fun age of adolescence. The industry's last decade has been explosive, headlined by subscriber growth at all cost mentality and a total tsunami of content creation that's streaming literally everywhere. With this deluge, we suddenly find ourselves in the fog of what many people have dub, the era of peak confusion. And you're right. It's exactly that. Streaming is a teenager. The result is that consumers are overloaded. So in this era of peak confusion, we're trying to simplify and improve the experience for consumers. Focusing on quality, not just quantity. And as David alluded to earlier, it was a key driver for the rationale of bringing this incredible collection of brands and content together in Warner Bros. Discovery. Third-party data confirms what you all are writing about and what we're seeing and what most importantly, the customers are experiencing. First, too many services and not enough to meet all my needs. Second, too much content, hard to identify the quality. Third, too hard to discover and find content that's relevant to me. And fourth, too expensive to have so many services. So as we emerge from the awkward teen years, we will look to address these consumer challenges with Max. The one service that has the most complete breadth of stories for any taste or mood, from the biggest superheroes to real-life champions, from culture-shaping dramas to taste-shaping entertainment, from fantastical realms to the realist of worlds, from what's up back to how you're doing, from old flames to new loves and from world saving young titans to teenage misadventures. We will offer an unrivaled range of choice. The one service that defines quality and has the most iconic franchises. We have more Academy award-winning movies than any other. We have more Emmy's than any other streamer. We have more popular series as voted by the fans than any other. Ultimately, quality, though, is in the eye of each viewer. And we are proud to have brands and content that are genre defining across all categories. We know that over 80% of TV and streaming viewers watch both scripted and unscripted content. And Max will be the one that continues to set the standard across all genres of entertainment. The one service that aggregates all this content into a single new and enhanced user experience that invites every member of the family to find and enjoy great entertainment and where great for you is easier to find. And lastly, the one service that provides all this incredible value for one great price. In this sea of streaming services, our potent combination of great value, strong user experience, superior quality with iconic franchises, unrivaled breadth. This is what makes us unique. So as David said, this is what makes Max the one to watch. We love this new tagline, this new brand, and yes, this new color as they signal an important change from 2 narrower products, HBO Max and discovery+ to the broader content offering and consumer proposition of Max. While each product offered something for some people, Max will have a broad array of quality choices for everybody. And we are excited to announce the launch of Max on May 23. We wanted to be welcoming to all an easily recognizable, including to a key customer segment, kids and families. We all love HBO, and it's a brand that has been built over 5 decades to be the edgy groundbreaking, trendsetter in entertainment for adults. But it's not exactly where parents would most eagerly drop off their kids. And yet Warner Bros. Discovery has some of the best known kids characters, animation and brands in the industry. Not surprising that the category has not met its true potential on HBO Max. We see this as a meaningful new engagement opportunity. Our leading kids brands like Cartoon Network and Boomerang bolstered by content from DC, Wizarding World, Hanna-Barbera and Looney Tunes used to get double-digit shares of the total 2 to 11 linear audience. In streaming, that has virtually disappeared. Even though all the great content and franchises are still here. Max will better curate our rich history of amazing animation seminal children's television and blockbusters the whole family can enjoy as well as new product features that will prioritize and enhance the kids user experience. And yet, while we are focused and excited about where we're going, we also want to honor and embrace where we've come from. And a critical part of that is preserving and protecting the most iconic trailblazing brand in entertainment. HBO is not TV. HBO is HBO. It needs to stay that way which is why we will privilege it in the product experience and also not push it to the breaking point by forcing it to take on the full breadth of this new content proposition. Had we kept the name in the service brand. And by doing so, we'll better elevate and showcase our unparalleled array of other content and brands that will be key to broadening the appeal of this enhanced product. Max is where consumers can finally say, here's a service that not only has something for everybody in my household, but something great for everybody in my household. I'll be back in a bit to take you through our enhanced product and user experience and the go-to-market approach for the U.S. But we all know the product is nothing without the content. And nobody knows great content better than the best partner on the streaming journey, Casey Bloys.

Thank you, JB. Good morning, everybody. So as you will see, the Max service is a wide-ranging mosaic of content that will be unmatched in the breadth, reach and excellence of its offerings. We are unique because we have the best in category across the board, be it ratings, awards or fandom. You want to laugh, we have the greatest collection of fan favorites from comedy giants. For pure escapism, we have the most iconic franchises in food, home, adventure and reality, all driven by engrossing characters. When it's time for a provocative story, we have the best in documentary, paranormal, horror and true crime. For the whole household, we have treasured films, timeless animation, inspirational nature and family focus unscripted. When you want to step inside another culture, we have remarkable international stories from around the world. For those immersive culture-shaping series that create water cooler buzz, we have unparalleled drama. Together, they create the one destination where any interest or mood or taste can be fulfilled. We know we can satisfy any caving because we have the must-have brands and franchises that people love. At Max, they will find what they want, when they want it. This means we're not a giant undifferentiated blob of programming. We don't have to take the time to try to create signature brands and characters to identify our shows because we already have them and we've had them for years. And they're a beloved source of thousands of hours of entertainment, allowing us to entertain Max subscribers with an average of more than 40 new titles and seasons every month. So how do we carry this forward? Let me start with Max Originals. First, the DC Universe. After a fantastic experience with James Gunn and Peter Safran on Peacemaker, we are energized about the ambitious plan they laid out a couple of months ago. We teamed up with them again to give audiences new stories to explore in the 5 series they announced, and we are really excited to be a part of their extraordinary vision for a unified DC that will travel across both film and television. But first, we have a fresh Max original series born out of Matt Reeves, Batman Universe. The Penguin written by Lauren LeFranc directed by Craig Zobel, [indiscernible] Colin Farrell, as he takes to the shadowy streets of Gotham City to apprise his memorable role in the Batman. We have just started production and here is a very early first look. [Presentation]

In addition to DC, Max Originals will look to take advantage of other Warner Bros. Discovery IP. We found strong success when we returned to the world of Sex and the City for a new look at iconic characters in the updated and just like that. Max Originals will continue to explore new stories and familiar universes that satisfy a diverse pallet making Max, the only one to watch, if you want to dive into our IP. Like when we pull people to the edge of their seats and a return to the town of Derry, Maine as we explore the people origin story to Stephen King's, IT, from Andy and Barbara Muschietti with Welcome to Derry. And horror fans are sure to be thrilled as we're announcing today that we are in series development for a fresh take on the scary, ever popular, The Conjuring. Based on the films from new line with James Wan and Peter Safran on board as executive producers. We have a comedy from a familiar world in development as well. We are announcing today that a new story derived from the Big Bang theory is in the works from executive producer, Chuck Lorre. Great entertainment born from iconic IP creatively, it's exciting, logically, it makes a ton of sense. Max Originals will also continue with broad, well-told original stories, great shows like The Flight Attendant, Hacks and The Sex Lives of College Girls are prime examples. We have a new original series currently in production, How to be Bookie from executive producer, Chuck Lorre and Nick Bakay, Sebastian Maniscalco, I practiced that, Sebastian Maniscalco, stars a veteran bookie struggling to survive the impending legalization of sports gambling. Here's a very early look. [Presentation]

We will also continue to dive into real-life stories. Several projects that were initially developed for discovery+ will now be Max Originals. We'll take an intimate look into the journey of one of the 21st century's most influential athletes in one final leap for Olympic Glory with Shaun White, The Last Run. We will go on a personal odyssey with Robert Downey, Jr., as he takes the fight to climate change in his own driveway. Megastar documents converting his prize collection of classic sports and muscle cars into eco-friendly automobiles for the 21st century in Downey's Dream Cars. And we will invite fans to join Jason Bateman, Will Arnett and Sean Hayes as they crisscross the country for live performances of their podcast, Smart List on the Road. Here's the first look. [Presentation]

Another powerful brand in our arsenal, Magnolia Network will also figure prominently in our overall programming strategy. The reach of Magnolia is among the strongest we've seen as its latest series Fixer Upper, The Castle was a top 5 show within its first few days on HBO Max and has remained a top performer since. So Max will feature a collection of original series, including the complete Fixer Upper library. Today, we're excited to announce an all-new installment in the revered Fixer Upper franchise, here are Chip and Joanna Gaines to share the details. [Presentation]

Moving off of Max Originals, Theatricals have always been a significant part of our offering. Mike and Pam are busy building out their slate at Warner Bros. Pictures, a new line, Max continues to be the proud streaming home of their first-run movies as well as DC films. This will be in the range of 20 movies a year. Films coming out of theaters are huge engagement drivers [indiscernible] marketing campaigns around these movies create significant awareness that benefits Max. Just a few of the fantastic films on this year's slate are The Flash, Barbie, Doom 2 and Blue Beetle. Shazam! Fury of the Gods will be on the platform the day of launch. And The Flash will land on the service in the fall after its exclusive run in theaters this June. Today, we are lucky enough to get a very early look at what James Gunn has said is one of the best superhero movies he's ever seen. Here's The Flash. [Presentation]

Across all of our beloved brands, Max is the one source for quality content that fits any craving. We meet every member of a household exactly where they are when they log on making this service the one to watch. I'll be back in a bit to talk about more new programming. But first, a key to our success will be the robust offerings from our portfolio of networks. Here's the architect of those iconic brands as well as our kids content, Kathleen Finch.

Well, Casey is exactly right when he says that brands are fundamental to our success. We have some of the biggest brands in television, Food Network, HGTV, Discovery, ID, TBS, TNT, TLC Adult Swim, Own and more. Our brands are the ones to watch for genre-specific content that satisfies viewers' passion for food, home, relationships, real-life adventure, true crime and animation for all ages. Our friends know exactly where to go for the content they love. Collectively, our network brands deliver more than 87 million total viewers a week. Max will have access to an amazing library and a curated bank of popular proven original content giving audiences even more entertainment options. Our most valuable franchises will live inside Max from day 1. And as a content engine for the service, our brands will continue to deliver even more original content for passionate fans. No one is better at creating an entire universe of related titles to keep audiences engaged from season to season, no matter of the platform. Take 90-day Fiancé. It's a smash hit franchise with 2 dozen spin-offs. It's filmed in 51 countries and broadcasted in 39 languages. And now that team brings us a new series about romance across the borders with Love & Translation. Let's have a look. [Presentation]

You've already seen how we continue to reinvent innovative franchises like Shark Week, Puppy Bowl, Ghost Adventures, Hometown, Impractical Jokers, Deadliest Catch, Gold Rush, Street Outlaws and many more to grow their already massive viewership and engagement on multiple platforms. Some of our iconic stars like Guy Fieri and the Property Brothers have even become their own franchises within our brands. And we've showcased familiar faces like Oprah Winfrey, Ina Garten, Christina and Tarek, Big Bird, Bobby Flay, the list is long. All these and more will be found on Max. In addition, our unscripted teams are finalizing a slate of brand-new titles. Chawl House takes us to one of the culinary capitals of the world, Tuscany, for a unique food competition series. Here's a quick look. [Presentation]

On a very different note, we're excited to bring audiences, Survive The Raft, equal parts, social experiment and survival epic, it answers the fundamental question of human nature. What happens when 9 people try to survive together while stranded at sea? True Crime has a new voice as actor and executive producer, Octavia Spencer will examine the shocking crimes that happened on the desolate stretch of an Oregon highway in Lost Women of Highway 20. And passionate animation fans will explore new interdimensional realities with our upcoming series, Rick and Morty, the anime. Also, in partnership with Warner Bros. Pictures and the Barbie Movie, we have the newly created HGTV series, Barbie Dreamhouse Challenge, hosted by super model and social media influencer Ashley Graham. The upcoming series features 15 of HGTV's top talent plus other stars from sister networks to create a real-life Barbie Dreamhouse for one lucky fan. Here's the first look. [Presentation]

This type of new collaborative thinking around maximizing IP shows how we can use our size and our properties in unique ways. We have many more of these innovative content partnerships in the works, and we'll use our reach and creativity to drive attention for Max. As JB mentioned, our deep library of family and children's programming, featuring favorite franchises like Looney Tunes, Hanna-Barbera, Sesame Street as well as feature films and revered brands like Cartoon Network means we have a huge vault of quality entertainment for kids and families to explore in Max. Joining this amazing collection are 3 new series from a legendary group of creators. First, inspired by the world of Looney Tunes, Tiny Toons Looniversity coming this fall, is a reboot of the Emmy award-winning favorite Tiny Toon Adventures ready for a new generation of children and families. Rock legend Bono brings us a re-telling of the classic Peter in the Wolf, which he in his best childhood friend Songwriter Gavin Friday, have been working on for 20 years with original art and music by Bono. And from Steven Spielberg's Amblin Television, get ready for the world premiere of the highly anticipated prequel animated series Gremlins: Secrets of the Mogwai. Here's a sneak peek. [Presentation]

This is just a snapshot of how our dynamic brands will provide an incredible array of quality content that appeals to the entire household, all available on Max. Thank you for your time, and I'd like to welcome Casey back.

Thank you, Kathleen. Now our streaming service may have a new name, but HBO has not and is not changing course at all, whether it be drama, comedy, documentaries or late night and specials, the programming teams are led by creative executives that I've had the honor of working with for going on 20 years and they continue to deliver some of those -- some of the most thought-provoking enjoyable and award-winning shows around. Late night series, which include favorites like Last Week Tonight with John Oliver, Real Time with Bill Maher drive current conversation. HBO specials feature young fresh voices like John Early in his first solo comedy event or returning comedy stars like Sarah Silverman. We have a whole new slate of captivating HBO original documentaries such as Love To Love You, Donna Summer, which takes a deeply personal look at the artist who became the defining sound track of an era. Season 2 of 100 Foot Wave, surfing legend Garrett McNamara returns to Portugal with some surprising newcomers and continues to push the boundaries of his sport and Being Mary Tyler Moore, a revealing look at the trailblazing career in private life of actress Mary Tyler Moore. And with shows like Barry, Somebody Somewhere, Curb Your Enthusiasm and a Black Lady Sketch Show, HBO hits every lag with the most compelling original comedy series around. When it comes to drama, the same programming team that brought audiences House of the Dragon, the White Lotus, The Last of Us and Succession is greenlighting new stories that will spark conversation and push boundaries. We're very excited about what's coming. Starting with the next installment of the genre-bending franchise True Detective. With writer-director, Issa López at the helm, True Detective: Night Country stars Jodie Foster, as she unearth a new mystery in dark icy terrain. Acclaim Director, Stephen Frears joins forces with Kate Winslet to tell the story of the unraveling of an authoritarian regime from the inside out in the limited series, The Regime. And a powerful adaptation of the Pulitzer-Prize winning novel, The Sympathizer, is a thriller about a communist fight during the final days of the Vietnam War is coming from Director, Park Chan-Wook and producer and co-star, Robert Downey, Jr. I'd like to give you all a first look at these 3 new worlds. [Presentation]

So as you can see, HBO remains HBO. And all of these great shows will be available on the Max service, the streaming home of HBO. I'd now like to welcome JB back to talk about how the service and experience will play out for the user. JB?

Thanks, Casey and Kathleen. And so now let's talk about where all this incredible programming is going to live. As we started this journey 12 months ago, we did a thorough assessment of our 2 streaming businesses as well as the technology and products of each. And we realized that while both were solid, they also each had important shortcomings. In summary, we needed to do the basics much better. And if we got this far with some suboptimal features and experiences, imagine what we will do when we get more of it right. So let's jump into the product. And I want to focus on 4 key areas of improvement for our customers and our business. First, our most important metric, we need to drive more engagement. More regular viewership through easier and more personalized discovery of all the content richness that exists on the service, which will make the experience much more enjoyable for our customers. Of course, the biggest ingredient to improving this will be the incredible quality and expanded breadth of content you just heard about from Casey and Kathleen. But we also see product experience is playing a big part in this, too. HBO Max has an amazing depth of content, but it's largely unexplored because we don't make it easy enough to find. A few steps. For example, on HBO Max, Three quarters of the viewership comes from the home screen only. By comparison on discovery+, the majority of usage comes from other screens deeper in the app. Furthermore, 4 times as much content drives the majority of viewership on discovery+ than on HBO Max. Simply put, people find and enjoy a ton more content on discovery+. And so with Max, we've leveraged all we've learned to improve circulation and content discovery and enable users to enjoy much more of our amazing array of stories. This starts with these big cinematic and immersive hero images with in-line video and a simpler, transparent user interface that always puts the content first. A new content navigation menu at the top makes it easier to find series, movies, what's new and HBO, consistent with what I said earlier about privileging that brand and content. We'll also more prominently feature our top brands that serve as another clear curated way for customers to find the content they love as well as genre hubs. We've added a brand-new quick shortcut to save content to watch later. And for the first time, the entire service will have differentiated and high-performing personalized experiences, including elements such as because you watch recommendations, and immersive hero images tailored for each user. We've significantly increased our investment and focus on machine learning, while still integrating an editorial voice, to deliver a human plus machine approach that is more and more usage happens in the service will help us get better and better at servicing the right content that's best for you. And nothing says doing the basics better, like finally, having personalized recommendations as to what to watch next when you finish a movie or series for the first time available on every platform. And we'll now have a default kids profile set up automatically for new subscribers that's easy to use and makes it simpler for parents to tailor how their kids use Max, including parental controls. Second, we need to enhance retention and reduce churn. And again, our expanded content offering and the engagement improvements I just outlined will be the most impactful way to improve voluntary churn. But the other half of our churn in the U.S. is involuntary, meaning people aren't choosing to cancel. It's that their card is expired, there are insufficient funds on that day or some other billing complication. Today, HBO Max is very limited in our tools and ability to proactively message and manage this with our customers. With Max, we'll finally be able to alert customers by sending failed payment notifications via multiple on and off product messages, including for the first time in-app messages on connected TVs where we see the vast majority of our usage. We launched recently, PayPal will leverage that as a new payment method for the service and more sophisticated [ retrilogic ] for when to best attempt billing. Third, our core architecture needed to deliver faster, more reliable and more efficient performance and a few examples of what I mean by that. We've simplified the Connected TV sign-in process by developing 2 brand-new features, so users don't have to waste time using their remote to type in their credentials. We rebuilt the downloads feature, so it's dependable and works consistently and we maniacally focused on app performance to get our customers watching their content as fast as possible. So app start times, video start times and the general navigation response times will be 20% to 30% faster depending on which device you're using. And fourth, we needed much more dynamic tools to optimize monetization. Our marketing team can now make pricing or promotional changes in a day through a self-service interface as opposed to what would have taken several weeks of engineering work each time in HBO Max today. And for our Ad-Lite offering, we will launch with a full suite of ad products to provide reach, reward and interactivity to our viewers. Built on a lot of our own tech stack that allows us to quickly iterate in this dynamic space. Max will provide innovative ad products to marketers with access to the most premium brand and content in the video industry while also rewarding our customers with one of the lightest ad loads in streaming. You'll hear more -- much more about this at our upfront in May. Our incredible team has been hard at work taking the best of both legacy platforms to deliver a technology stack and product that works much better. And this is only version 1. We have a packed road map product and tech road map that will help us do even more with regular iterations and new releases. All these enhancements will deliver a stronger experience for our customers and kick off the beginning of a very productive flywheel. More engagement drives better retention, which reduces churn, improves customer satisfaction, all of which will ultimately help us continue to scale our subscribers. Two more things related to the product that are important to spend a minute on. First, on May 23, the HBO Max app will automatically update to the new Max app for a large portion of our users. Due to the requirements of certain platforms though, another segment of our users will be prompted when they open HBO Max to download the new Max app. And with only 2 clicks, they can start watching again. Regardless of migration pattern, all HBO Max subscribers, user names and passwords will carryover automatically and their profiles, watch histories, watch rails and billing will be seamlessly transition. Second, discovery+ subscribers will be unaffected by any of these changes. And while we will offer them various opportunities to try out Max, we will also continue to nourish and delight them on discovery+ if that's where they prefer to stay. As we said before, discovery+ has maintained a sizable and engaged user base and is a profitable streaming service. So we don't want to leave any profitable subscribers behind. And now how much for all this goodness, unrivaled breadth, superior quality with iconic franchises, stronger user experience and all that for the same price. It's great value. Max Ad-Lite will remain $9.99, and Max Ad Free will remain $15.99. New customers signing up for Max on these plans will get HD quality, 2 concurrent streams and for the Ad Free subscribers, 30 downloads. And we're introducing a new ultimate plan for $19.99 that will provide consumers the highest quality 4K video, HDR with Atmos, 4 concurrent streams and 100 downloads. Existing monthly subscribers will still have access to their current plan features for at least 6 months, at which point they will then be able to choose to move to the ultimate plan if they want those additional features. These are our plans for the U.S., and we'll update you further as we rollout in the rest of the world later this year and into next. Remember, this is just the beginning. Our global rollout time line remains consistent with what we told you last August. We still have over half of the global streaming universe to go after. The financial and subscriber goals we provided last summer also remain unchanged, including, as David mentioned earlier, our priority focus on profitability versus just scale. So one last time. unrivaled breadth, superior quality with iconic franchises, stronger user experience and great value. We cannot wait to have you and all our existing and new customers enjoy this amazing offering starting May 23. And I'm excited to tell you about our campaign to launch Max. The campaign embraces the idea that while we all have different sizes and different moods, we all want the best. It kicks off with an announcement phase tomorrow and will run into mid-May when we transition to a launch phase, we'll have our biggest marketing campaign ever across all types of media, ramping up as we get closer to launch date. And we'll take full advantage of the unique reach of the Warner Bros. Discovery portfolio. We'll harness the power of our 6 top 10 cable brands and our portfolio that reaches more than 30% of the viewing audience on any given night. We'll leverage our arsenal of digital outlets that reach almost 70% of the Internet population in the U.S., thanks to powerhouses like Bleacher Report and cnn.com. And we not only have the best content and franchises as differentiators, but we have the best marketing platforms to promote Max and some of the best talent to help tell our story. Take a look. [Presentation]

So we really appreciate all of you being with us today, and we couldn't be more excited about bringing -- finally getting going on May 23. But we aren't quite done yet. I want to bring Casey back to share a couple of very exciting final announcements. Casey?

Thank you, JB. Okay. So 10 years ago, HBO first aired a series that became a beloved phenomenon. Game of Thrones is among the most awarded drama series in television history, winning 59 Emmys and still stands as HBO's most viewed program ever. We then returned to the Land of Westeros and House of the Dragon debuted to the largest audience for any new original series in the history of HBO. At fandom only continued to grow, all told House of the Dragon episodes are averaging nearly 30 million viewers and the Golden Globe winner just started production on season 2. Fans of the franchise will be thrilled to hear that we are announcing today and HBO has another story coming from George R.R. Martin's iconic universe. We are moving straight to series with A Knight of the Seven Kingdoms: The Hedge Knight. Executive produced by George R. R. Martin, Ira Parker, Ryan Condal. Century before the events of Game of Thrones, 2 unlikely heroes, Land of Westeros. Young naive a courageous knight, Ser Duncan the Tall, and his diminutive Squire Egg. We can't wait to share the story with you and the world. And we're not done there. For Max originals, we're unbelievably excited to announce our return to the biggest entertainment franchise over the last 25 years. Over the course of the next decade, David wanted me to make sure you heard me say next decade, 10 years. We once again enter the Wonderous World of Harry Potter as a multi-season live-action series for the first time. With a new cast playing the original beloved characters over the next 10 years, we truly have the time to tell more in-depth stories in ways the world has never seen before. This new series will take shape as a faithful adaptation of all 7 original books and will stand alongside the iconic films to an entirely new generation of Harry Potter fans. We're so excited to enter this rich universe and explore incredible characters in a serious format. With J.K. Rowling serving as an executive producer, we do so with the full craft and care. That is the hallmark of this franchise and our amazing team at Max and Warner Bros television. The Harry Potter and Wizarding World universe is uniquely global, reaching every language and shows no sign of slowing down for billions of dedicated fans around the world couldn't be more thrilled for this next chapter. Now here's David to close us out.

Well, seeing those 7 Harry Potter books having read those with my wife and I read to each of our 3 kids. It was the first book that each read. It's really moving. And the idea that for 10 consecutive years, people will see Harry Potter on HBO. I mean it's really, it's something. So a big thanks to Casey and JB and Kathleen, who did a really fantastic job to the whole team here at Warner Bros that spent the last month really trying to put forward our presentation. But you could see it, we're a content company. This is who we are. This is what we do. We tell stories. You saw some of it today but there's a lot of companies that are in a lot of businesses. This is the only business that we're in. We're going to drive free cash flow and we're going to invest in great stories. So and as the world's premier pure storytelling company, I think we have a very clear sense of who we are and where we're going. We're on a mission. We're on a mission to be the one to watch. And as you've seen today in Max, we've got the goods, and we're going to keep producing and keep telling stories to delight audiences around the world so that they believe and they tell all their friends, Max, the one to watch. So buckle your seatbelts, get ready for May 23. It's going to be a fun ride. Off we go. Thanks again for coming. Really appreciate it.