What is Max Sports Tier’s role in NBA renewal talks and managing pay-TV relationships in the streaming era?

Warner Bros. Discovery’s Max Sports tier is set to launch on October 5th, offering live coverage of NBA, NHL, and NCAA March Madness games on the streaming platform. Unlike other streaming services, Max Sports will simulcast the games alongside linear networks, giving subscribers the option to watch on either platform. The new tier will only be available as part of Max, and existing subscribers will have free access during a trial period until February 29th, 2023.

Warner Bros. Discovery’s previous sports streaming venture, B/R Live, did not perform well due to technical issues and a lack of must-see live events. However, the company has learned from this experience and is confident in the success of the Max Sports tier. JB Perrette, CEO and President of Global Streaming and Games, and Luis Silberwasser, Chairman and CEO of Warner Bros. Discovery Sports, spoke with Deadline about their plans for Max Sports.

Perrette explained that offering a stand-alone sports app is challenging because it needs to provide more engagement for subscribers, even during non-premium sports events. Warner Bros. Discovery has learned from its experience with Eurosport in Europe and found that packaging sports with their Discovery+ streaming service was more successful in terms of revenue and engagement.

Silberwasser highlighted three key takeaways from the failed B/R Live venture. Firstly, stand-alone sports streaming is difficult, especially when relying on lower-tier sports events. Secondly, the power of the Bleacher Report brand was evident, and Max Sports will capitalize on that. Lastly, the new streaming tier will target a younger sports audience that may not be reached through traditional linear channels.

When asked about the challenges of selling the concept to pay-TV distributors, Perrette emphasized that Warner Bros. Discovery has already established partnerships with affiliates through its HBO Max service. Additionally, the company is not taking content away from traditional pay-TV networks but providing consumers with more choice.

As for the pricing model, Warner Bros. Discovery decided on a $9.99 monthly charge to generate incremental revenue and support the sports ecosystem. The company aims to make the sports tier an additive feature rather than disadvantaging existing subscribers. Silberwasser expressed the goal of simplicity and clarity in offering the same games on both linear networks and Max Sports.

In terms of future contract renewal discussions with the NBA, Warner Bros. Discovery believes that adding the Max Sports tier positions them well. Their interests align with the NBA’s goal of reaching a large audience while protecting the linear ecosystem. The strategy reinforces Warner Bros. Discovery as a strong partner for the NBA.

Overall, Warner Bros. Discovery’s Max Sports tier aims to provide subscribers with more sports content options while maintaining partnerships with pay-TV distributors. By leveraging their experience and lessons learned, the company is confident in the success of the new streaming offering.