We’ve heard it’s around 80% of the programming.
We haven’t said specifically, but discovery+ is running with around 60,000 episodes of content. In the new world, a pretty good percentage of the most popular discovery+ content will be available on both platforms. If you’re a $4.99 customer of discovery+ and you’re getting five minutes of advertising per hour, these people may decide, “At $4.99, I’m fine. I’m going to stick with what I have. Thank you for keeping me in this product that performed. I really enjoy it.” We’re selling a lot of advertising on it. Or do you want to step up and pay five more dollars, and get the entire Max experience? You have people who may say, “I like this product at $9.99, so sign me up.” There may be some people who have the $14.99 ad-free HBO Max who say, “I’d rather have the $9.99.” So really all roads lead to a big growth boom, coming from the Max AVOD business and the discovery+ ad business combined. I really like our hand.

What’s different if you’re an advertiser on Max or discovery+?
First of all, what’s different is the ad load. HBO Max AVOD has been in the market since June of ’21. But it wasn’t until February of ’23 that we began to offer ads alongside HBO Originals on the service. So, if you are a $9.99 customer watching “Succession,” you’re going to get an ad from one of two “title sponsors,” Mercedes and Vital Farms. Those companies own the first 45 seconds of that consumer experience, similar to pre-show ads that were shown in the cinema, but a condensed version. These title sponsors get the opening, and we can customize that experience. You’re giving an ad-supported consumer the most talked-about shows on the platform commercial free when they’re paying for commercials, but the (title) sponsor gets a lot of the rub off. And it’s going to get even better when we expand it. It will be the best deal for the consumer streaming dollar. So, we’re going to talk to advertisers about the $9.99 version a lot.

Besides light ad loads, the second thing that’s different is there’s much more targeting available in the streaming home than in linear. In the streaming world, it’s 100% targeted. We build hundreds and hundreds of segments that are standardized and customized. The linear world is more index-based buying. For most advertisers, they’re not going to park 100% of their money in streaming. As the years go by, there will be more ad viewership in streaming than there is in linear. Right now, it’s more like 80% or 85% of the ad impressions are seen on the 20 linear networks and about 20% are seen on the streaming services. But that ratio will change over time.

How fast are we likely to see that transformation hit? And what does that mean for what you do?
Today, there are about 130 million US homes, and around 80 million subscribe to some form of paid television and 50 million are streaming only. If you look at the demographics, median income and net worth of those 80 million homes, they have the spending power of a lot more than what the distribution represents. What kind of home keeps the cord? No. 1 is wealth. No. 2 is sports interest in the households that are wealthy enough to afford the full bundle. If you have a sports fan in your household, it’s hard to give up on the bundle. So, when does streaming surpass linear? It’s a long way off.

Let’s talk about metrics and currency. Metrics have been a complicated issue for a while. What’s the current state and where are those issues headed?
If I look back through my career, I think more progress was made in the last 52 weeks than any other year in my career in trying to get to a more stable, more accurate audience measurement. And I think it’s been a really, really big step forward. The industry is in the business of selling about $60 billion worth of traditional television advertising per year, where it’s all based upon 40,000 households speaking for 130 million households. We’re in the process of ramping that up one thousand times. We’re very close to being at a point where 40 million homes will set the bar for 130 million TV homes. I look forward to that. I’m trying to be patient about it. And there’ll be cross-platform measurement too. But let’s start with better, more accurate measurement for linear television, which is still 75%, 80% of our revenue. At some point, we’re going to flip the switch. I was hoping it would be this Upfront season. I really want to get there as quickly as the industry will allow it to happen.

Let’s talk about DEI – diversity, equity, and inclusion – and how that manifests with WBD.
There’s a lot going on with DEI in this company. We have the Oprah Winfrey Network. We have the NBA, we have TLC, we have “The Jennifer Hudson Show” in syndication. There’s a lot of content that we create with diverse casts, diverse audiences, diverse themes. It’s a big initiative for our company, but I would like to point out one deal in particular, an arrangement with GroupM that incentivizes GroupM advertisers to support diverse creators. If there aren’t enough Black-owned or minority-owned media companies or media properties, what they’ve done is come to leading media and entertainment companies and said, “We would like to get access to Black-owned production companies.” What we’ve done is we’ve started to create content, giving GroupM and their clients the opportunity to help present that content through advertising support.

There’s a really good business reason to do this, given the size and growth in those audiences, and over-indexing among Latino and Black audiences with entertainment as a whole and with premium content, right?
It’s the growth opportunity. The Chief Brand Officer of Proctor & Gamble, Marc Pritchard, has been quoted saying, “Multicultural marketing is now mainstream marketing.” A lot of the growth is going to come from multicultural. Those audiences also have a younger median age.

What’s your vision of what Max and Warner Brothers Discovery are doing three to five years from now?
The biggest growth will come from Max. We continue to support the traditional big bundle, through sports, through CNN, through making big investments into the linear channels themselves.So, we want to be a real big player in the bundle to keep the bundle stable. I wouldn’t be shocked if a day comes where the bundle number of subscribers starts to reverse and go up. I think it reaches a point where maybe consumers will say, “Let’s go back and do the cable bundle.” It could be a better value.