David Ellison plans to fold HBO Max and Paramount+ into one app, but the cheapest, quietest streamer he now owns may be the easiest money on the books.
If you pay for Discovery+, your subscription just changed hands, and nobody at the new company has said a word about it. When David Ellison laid out his streaming plans for the combined Paramount Skydance and Warner Bros. Discovery last week, the headline was a long-term plan to merge HBO Max and Paramount+ into a single app, with a bundle coming first. Discovery+, the home of HGTV, Food Network, TLC, Investigation Discovery and Deadliest Catch, was not mentioned once, according to The Hollywood Reporter. That silence is worth a closer look, because Discovery+ may be one of the few streaming businesses in the new empire that is already doing exactly what Wall Street wants.
The Subscriber Math
Antenna estimates Discovery+ had 4.9 million paying U.S. subscribers as of August, about half of them on the $5.99 ad-supported plan and the rest on the $9.99 ad-free tier. That is small next to Paramount+, at roughly 34.5 million, and HBO Max, at about 28.3 million. Put together, the two flagship services Ellison wants to merge have about 62.8 million paying U.S. subscribers, which makes Discovery+ roughly 7 percent of that combined base.
But run the numbers on its prices and the picture changes. By our own back-of-envelope estimate, 4.9 million subscribers split evenly across those two tiers works out to nearly $40 million a month, or close to $470 million a year, in U.S. subscription revenue alone, before any advertising. That is not a rounding error for a company carrying roughly $80 billion in debt.
A Cheap Service to Run
The bigger point is what it costs to run, which is almost nothing. Discovery+ stopped making originals and now functions as a pure cord-cutter service, putting the cable networks’ shows online the day after they air. The production costs sit with the cable channels. THR’s sources describe it as profitable, possibly in the low nine figures, with expenses that amount to little more than cloud hosting, and churn is relatively low because its audience, home renovation and true crime fans in particular, tends to stick around.
That is a remarkable turnaround for a service that launched in January 2021 with ambitions to be a major player, reached 24 million global subscribers by early 2022 and was then nearly shut down after the Warner merger. As recently as February, WBD’s then-CFO Gunnar Wiedenfels was telling investors that “it is a profitable business.” He did not make the move to Skydance.
The Olympics Question
There is one asset that could pull Discovery+ into the spotlight. Warner Bros. Discovery held exclusive pan-European pay-TV and streaming rights to the Olympics through 2032, and those rights now belong to Skydance. Where the Games end up streaming in Europe will say a lot about whether Discovery+ is part of the long-term plan or simply allowed to keep earning quietly.
Casey Bloys’ Expanded Portfolio
Ellison has already put HBO chief Casey Bloys in charge of streaming, adding Paramount+ and Pluto TV to his HBO Max responsibilities. Discovery+ was not named in that announcement either. The likeliest outcome is the least dramatic one: a profitable, low-maintenance service that nobody needs to fix, eventually folded into the bundle as a lifestyle tier. For a company also facing a court-ordered settlement conference over the merger later this month, an asset that requires no attention is a gift.
We have already asked Ellison to protect the studios he just bought. Discovery+ may be the one corner of the empire that is best served by being left alone.
