Warner Bros. Discovery to merge streaming services HBO Max, Discovery+

(Reuters) -Warner Bros. Discovery (NASDAQ:WBD) Inc said on Thursday it would merge the HBO Max streaming service with Discovery+ as a single offering, combining WarnerMedia's dramas, comedies and movies with Discovery's reality shows.

The move, which confirms a Reuters report L1N2ZE2VJ, is seen as an attempt to lure more customers as streaming services face a slowdown in subscriber growth after a boom during the pandemic and steadily rising frequency of cancellations.

Warner Bros. Discovery also said it was exploring the opportunity for a fast or free ad-supported streaming offering.

The newly merged company, which reported a second-quarter net loss of $3.4 billion and a slight decline in revenue, is aiming to reconfigure overlapping businesses from WarnerMedia and Discovery.

The media giant was forged by the $43 billion merger of Discovery Inc and AT&T (NYSE:T)'s WarnerMedia, home to the "Harry Potter" and "Batman" franchises, cable networks such as CNN and the streaming service HBO Max.

Warner Bros. Discovery, which reported combined results for the first time, also disclosed 92.1 million streaming subscribers at the end of the second quarter.

Prior to the merger, HBO and HBO Max boasted a combined 76.8 million subscribers, including 48.6 million in the United States. Discovery+ ended the first quarter with 24 million subscribers.

The net loss includes about $2 billion of amortization of intangibles, about $1 billion of restructuring and other charges, and $983 million of transaction and integration expenses, the company said.

Customers ending their services hover at around 37% in the United States - a rate that could well increase as surging inflation forces a paring of discretionary spending.

Shares of the company, which reported revenue of $9.83 billion, fell 8% in extended trading.