Ladies and gentlemen, welcome to the Warner Bros. Discovery, Inc. First Quarter 2023 Earnings Conference Call. [Operator Instructions] Additionally, please be advised that today's conference call is being recorded. I would like to hand the conference over to Mr. Andrew Slabin, Executive Vice President, Global Investor Strategy. Sir, you may now begin.

Good morning, and welcome to Warner Bros. Discovery's Q1 Earnings Call. With me today is: David Zaslav, President and CEO; Gunnar Wiedenfels, our CFO; and JB Perrette, CEO and President, Global Streaming and Games. Before we start, I'd like to remind you that today's conference call will include forward-looking statements that we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include comments regarding the company's future business plans, prospects and financial performance. These statements are made based on management's current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, the company disclaims any intent or obligation to update them. For additional information on factors that could affect these expectations, please see 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 its reports on Form 10-Q and Form 8-K. A copy of our Q1 earnings release, trending schedule and accompanying slide deck is available on our website at ir.wbd.com. And with that, I am pleased to turn the call over to David.

Hello, everyone, and thank you for joining us. We've had a very busy and productive year thus far. And while we have lots more to do and more to attack, and we are aggressively doing just that, the diversified nature of our company continues to provide a strong foundation that enables us to weather challenging environments, like the one we're in, and still generate meaningful free cash flow. We expected the marketplace to be challenged. And with clear eyes, we remain confident in our strategy and our ability to generate free cash flow and end this year below 4x levered with our streaming service as a tailwind. Gunnar will take you through the specifics. But for some perspective, on a trailing 12-month basis, we generated $2.1 billion in free cash flow, even after absorbing $1.2 billion in cash restructuring and merger-related costs. Turning to the quarter. While Q1 is seasonally our weakest and we saw challenging revenue headwinds, mainly on the linear TV and studio sides, we are on track to achieve this year's financial targets. And we see a number of positive proof points emerging across our businesses with Direct-to-Consumer, perhaps the most prominent. We have strong command and control of our DTC business. We made a meaningful turn this quarter, generating $50 million in EBITDA and adding 1.6 million new subscribers. And we feel really good about the trajectory we are on. We now expect our U.S. DTC business to not only break even ahead of schedule but to be profitable for the year 2023, this year, a year ahead of our guidance. And it's worth noting, HBO Max and discovery+ are still only available to less than half of the global streaming market. So there is significant runway ahead of us. And we are attacking this opportunity.…

Thank you, David, and good morning. On balance, I'm very pleased with where we are and very encouraged by the progress of our priority initiatives, which are all moving forward as planned. We generated 12% constant currency EBITDA growth this quarter, a strong starting point for the year and also the first quarter of EBITDA growth since closing the merger. I remain confident in our guidance of adjusted EBITDA in the range of low to mid-$11 billion and 1/3 to 1/2 conversion to free cash flow with net leverage at the end of 2023 comfortably below 4x. As always, there are a number of moving pieces. And this quarter is no exception, so I'd like to address the key puts and takes impacting our results and outlook. Starting with DTC. As we enter this next leg of the journey, kicking off with the launch of Max on May 23, we're already very pleased with the traction we are seeing, having generated $50 million of EBITDA this quarter. Perhaps more importantly, we're continuing to see improvements across key operating KPIs, such as in our retention metrics. We also added 1.6 million subscribers globally in part due to the strong creative success of The Last of Us. We've driven a healthy amount of lasting efficiency improvements across this business through the initial phase of DTC integration. In fact, DTC operating expenses were down over $760 million or 24% excluding FX on a pro forma basis in the first quarter. All of this now provides much greater clarity on the path forward to establishing a sustainable platform set up for dynamic and profitable growth for years to come. As we relaunch here in the U.S. and plan additional launches later in '23 and into '24, we'll continue to be guided by a focus…

[Operator Instructions] Your first question comes from the line of Doug Mitchelson with Credit Suisse.

David and JB, I think most interesting, how would you define success for the launch of Max, or the relaunch of Max as you want to define it? I think there's a lot of discussion in terms of choosing Max' brand and the need to build that or rebuild that. David, you mentioned actively trying to include news and sports in the lineup. And so I'm just curious whether it's engagement, whether it's subscribers, whether it's ultimate profitability. How should investors think about what to expect for Max in the coming quarters? And Gunnar, I think you made some strong statements in your prepared remarks, but obviously, a lot of investor focus on free cash flow generation and balance sheet here. And I guess, the just general question is what's your level of confidence in the balance sheet targets over the next couple of years? And what gives you that confidence, especially with the year being back end-weighted?

Thanks, Doug. So we're excited about the 23rd. Look, we've turned the corner on our streaming business. We had a different view of it. We've focused on it very hard. And we built what we think will be a very strong, independent business. And it starts with profitability. And so we made $50 million this quarter. Our U.S. streaming business will be profitable for the year. And we have real scale. And so -- and when you run a business, you're looking for growth, which we're going to get in the streaming business, and we're driving to get throughout the company, and there are a number of areas where we think that we're -- as the -- we know that as the economy improves, we'll see real growth. But the key here is our U.S. streaming business is no longer a bleeder. It's hard to run a business when you have a big bleeder. And so getting this business under control, focusing on what people love to watch, how do we create content that people love? And now as we launch Max, we'll be able to nourish and delight subscribers with the greatness of HBO, which on Sunday nights is really a cultural moment, whether it's White Lotus, House of Dragon, The Last of Us, Succession. And then put it together with Discovery, which has -- the Discovery content, which has been really strong for us. So number one, we want an easy, smooth transition. That's why we're not doing anything with pricing. We focused very hard on letting everybody know how to make that transition. We have -- right now, we have a really good hand. And so let's make the transition. We've got technology that's far superior in terms of delivering the platform itself and how it can work against all this great content. But let's do a smooth transition and then have people discover the quality content, the diversity of content and the quality of the platform itself, which will only accelerate growth. JB?

Yes. I think, Doug, just to add on to David, I think in the very near term, migration success is sort of one key metric, i.e., getting the customers who are on HBO Max today successfully migrated over to Max. And then over time, there will be three other metrics and a fourth that will come. The three would be: brand awareness, obviously we're building a brand with Max now that is new that has a different proposition, a broader proposition for something for everybody in the family; number two, customer satisfaction; number three, engagement. As we talked about on the April 12 event, a lot of it is around seeing all this content coming together and the breadth of the proposition driving higher utilization and therefore helping retention. Those, I think, are the core ones in the initial few months. And then over time, obviously as that flywheel continues, we obviously want to see subscriber growth and scale as the additional metrics. So those are the ways that we'll look at success.

All right. And Doug, on the free cash flow question, as you just heard me say in the prepared remarks, I have a high level of confidence in our guidance and our ability to deliver here. And taking a step back, there's no doubt the environment continues to be challenging. We're working against pretty significant reductions in ad sales. And as I laid out, see gradual improvement for the second quarter. But it's gradual. So there's that. But what you're also seeing in our results is what we've referred to as the built-in hedge, right? We've got a great game, Hogwarts Legacy. The box office was a little weaker. But across the entire footprint of the company, managing as one integrated company, we have enormous opportunity. And so we don't want to be in the business of predicting ad market developments in the second half. As I said, I have confidence in our guidance without assuming a complete turnaround here because we're focusing on what we know. And what we know is the control that we have over the initiatives that we put in place over the past 12 months. And they are -- we're knocking them out month-after-month, quarter-after-quarter. We've got systems coming online. We've got individual workflows that are going from 10 to 12 hours a pop to 3 minutes. I mean, there's a lot that's happening. And we have clear milestones scheduled out for the rest of the year. And looking at that, I will -- I have great confidence that we're going to continue to deliver these improvements. And as I pointed out earlier, on the cash flow side, it's even more exacerbated than on the P&L side with the seasonality of our free cash flow. And the $930 million in Q1 was pretty exactly in line, actually a little bit better than what we had budgeted for. And with that, I have full confidence we're going to deliver for you guys.

Your next question comes from the line of Robert Fishman with MoffettNathanson.

I have one for David and one for JB or Gunnar. First, David, can you expand on the strategy you mentioned in your prepared remarks and maybe the financial benefits of licensing your HBO and Warner Bros. library content internationally, some of the deals you discussed? And how do you balance those licensing deals with your ambitions to scale Max outside the U.S., if and when you choose to launch in those markets? And then for JB and Gunnar, on DTC, anything you can share about the DTC retail versus wholesale trends, I noticed the wholesale revenue dragged down overall DTC revenues, and just whether that wholesale pressure should continue throughout the year?

Thanks, Robert. We're focused on taking HBO around the world. The fact that we have real scale around the world, that we have content in every language, we have channels in every country to promote is a real advantage for us. But we're really driven by free cash flow and long-term free cash flow growth. And so if there's a market, like India, where we could structure a deal where we can make a lot more money by licensing our great content in that market with an option at the -- which we always have at the end of that deal to take another look at that country, with our platform that's already built, we're not building a new platform for each country, and see if we can go in ourselves, can we generate more long-term profit and free cash flow? And so it's really an economic analysis. You will see in most markets, it will be us building asset value, owning it, driving it for long-term value and growth. You saw us do it at Discovery. We were the first outside the U.S. We were in 200 countries. And it generated a long tail of free cash flow and real EBITDA growth for us. So I'm very optimistic, we're in less than 50% of the countries. It's very hard to have a business that's profitable just in the U.S. I've always thought that you really need to be above the globe. And that's the advantage. That was the value creation of the FAANG companies, that they had that scale. We own all of our content. And the idea that we're starting off by having a business that's profitable this year in the U.S. and then we go on this journey of driving it outside the U.S. with a strong platform that's already built, I think, is -- bodes very well for us.

Yes. And Robert, I'd just add to what David said, there's two filters as we look at it. There's the strategic filter and financial filter that David just talked about, which obviously is preeminent, which is a market like India, if we don't believe we can be profitable as a streaming service within a 3- to 5-year time horizon, at the end of the day, right now, that's not going to be our priority focus. And so if the opportunity is to license and take a bunch of money off the table to help support our growth initiatives in other markets where we think we can scale more profitably and more effectively, we do that, number one. Number two, there's just a practical reality that some of these licensing deals are done in markets where we're just not going to be ready to launch from a platform perspective. As David mentioned in his prepared remarks, we've got a timetable to roll out our new product and convert and migrate our existing HBO Max customers over the next 12 months-plus, then some of these things are going to take into '25 and even beyond to launch in new markets for our platform to be ready. And so in the meantime, it just makes perfect sense for us to take as much money off the table as possible. And so that's the thinking.

The added advantages in these markets, they're still seeding our brands in those markets. So we're getting value. The brand itself is being driven as quality-curated. And then we have the hand-off when we think that market can be profitable.

And we have -- I'm sorry, one other thing I'd say is in all these deals, oftentimes what we've done, which is better than what we have in existing licensing deals, is ensuring that when those deals expire, we have stronger cliffs for the content to come back, so we can actually -- when we're ready to launch, if we assume we're going to launch in those markets at the end of those deals, we get more of our content back immediately.

Robert, the only thing I would add is on your revenue growth and wholesale question, two things to keep in mind. Number one, Q1 had a bit of an overlay with content sales revenues. And as we pointed out in the prepared remarks, obviously the ad market also on the digital side isn't the greatest right now. So I see a lot of upside opportunity here as that market comes back. And specifically for wholesale, remember that our subscriber base contains the linear HBO subscribers that are obviously showing similar trends to what we're seeing in other parts of the linear ecosystem. Needless to say, we expect the total to be a growing business. We'll see how the launch goes in May. We're looking forward to getting that product out. I pointed out some of the overlapping subscribers. We'll see how those wash out. But we're definitely looking for revenue growth for the second half of the year and in many years to come.

Your next question comes from the line of Steven Cahall with Wells Fargo.

Maybe first, David and JB, on DTC profits that are tracking ahead, just curious what's performing ahead of your expectations there. Is it the subscribers and revenue? Is it more about the cost reduction? And I know you're new into the Max launch domestically. But I'm just curious if you're seeing legacy HBO subscribers, which I think, David, you were talking about on CNBC this morning, if you're seeing those folks engage with the Discovery content, it's kind of different genres. But I know that's the hope, so just wondering what kind of early trends you might be seeing there. And then Gunnar, on the adjusted EBITDA guidance for the year, I think it still implies low $11 billion. From your comments, it sounds like the macro is still a little tough. But you're bullish with the incremental U.S. DTC profits. So I'm just wondering, with DTC performing better and no change to that guidance, is there anything that's performing worse? Or is that better just kind of in the range as we think about all those different components?

Do you want to start with the second?

All right. Let me start with the guidance quickly. Because you're right, obviously the DTC point is the big, big positive driver here. The most important point, as I laid out, is we have very clear visibility into our transformation initiative and the impact that's going to have on the cost base. Also for the Studios, definitely a support here for the second half of the year, a very strong summer slate that we're really looking forward to launching and the revenues that those are going to hit from Q3 onwards. Again, I don't want to speculate about the linear business. But remember that the comp in the second half is going to be much more beneficial. Because especially the fourth quarter last year was pretty anemic in the scatter market and -- but at the end of the day, we still have a lot of shots on goal here. And it's a hit-driven business, especially on the Studios side. That's why we're giving the range. And I feel comfortable with that range with what I know today.

Look, when we think about Max, as we launch, we have real scale, quality content, a broader aperture. The real challenge is the churn. Very difficult to build a strong business with churn. The churn on discovery+ is quite low. The churn on HBO Max is high. And so driving that churn is as or maybe more important than driving the growth. If we can drive down the churn, the growth will be very substantial. And so we have a series of attacks in order to do that. The primary one is how do you nourish more people in the family? And the more people that use it, we've seen that -- we've been at this in Europe for more than 8 years. The more people that use it in the family, the more engaged people are, the broader the offering and the lower the churn. We also have a technology advantage now in terms of catching people that want to buy the product that we weren't able to reach out to. And this is a business of artillery. We're adding a lot of artillery here to the offering in order to get more viewers in the family engaged and excited about the amazing quality content that we have. But we have more weapons. And we have sports and we have news. And those are on the sidelines right now. We have a great product. We're going to -- that's now going to be profitable for the year. Let's drive that. Let's drive the brand and know that we have -- we can move to the left and to the right with sports and news, which we've done in markets in Europe, which has been additionally advantageous. JB?

Yes. Steven, to echo what David said, we've seen it across multiple metrics. We've seen it across retention, as David rightly pointed out. We've had, in the first few months of this year, record low churn on HBO Max.

But the churn is still pretty high.

It's still high. But we've been...

It's in the acceptable range in order to build the kind of business that we will build.

Yes. And as we've talked about at the April 12 event, that was all done through a kind of, what I'd call, a slightly more analog attack plan. We're now getting to a tool and a platform as we launch Max that we think has a lot more ammo to be able to actually attack churn in a more aggressive fashion. So we think we're just at the beginning of that upswing. The second is we obviously had price rises in the U.S. as well as a few of the Latin American markets. And the reality is the great news there is we've seen much better reaction and much better retention as well on ARPU increases in those markets. And so that's been a positive. We've seen efficiencies in -- across the board in some of the items that Gunnar talked about. And then obviously, over time, we've seen some scaling. But we've been measured in our scaling. And so that's been great. And as it relates to the content cross-pollinization, the reality is we've done very little so far. But we have done stuff with Magnolia, for example. And as you heard us, I think, hopefully talk about before, it was a top 10 performer on the service at launch and even a top 5 in the initial week of launch. And so we feel very positive about what that means. And as we've cross-pollinated content outside of the U.S., we've seen similar trends of great reaction and reception from HBO Max consumers to the discovery+ content. So when we go full throttle with it when Max comes together, we feel very optimistic.

Steve, if I can just add one thing, from the perspective of the longer-term outlook here, again we gave guidance a year ago around how we see this DTC business developing. As I said earlier today, many of the operating KPIs are tracking much better than what we assumed. Again, the big thing is getting this product launched. And then we will learn so much about assumptions that are now assumptions and hypotheses. And in 2, 3 months, those will be backed up by a lot more actual data. So this is going to be a super important period. But needless to say, with the U.S. breakeven and actually hitting profitability for the full year happening this year a full year ahead, now remember, as we said before, we are obviously losing money in the business internationally as we are launching markets and as we are earlier in the maturity curve in many of the international markets. And that's going to continue. But as I said earlier, we've got that $1 billion-plus guidance for 2025 for the entire combined the business. And we'll update that on the basis of what we're learning once the product is in the market.

Your next question comes from the line of Peter Supino with Wolfe Research.

On the subject of free cash flow, adjusted for one-time charges, you mentioned that the last 12 months, the company had produced a little over $3 billion of free cash, adding that $1 billion-plus of one-time charges to the $2 billion-plus of underlying. If your expectation is that synergies will contribute $2 billion in '23, it seems like your free cash flow, it has an easy path to $4 billion, which is within your guidance range. I'm wondering if you'd add any significant puts or takes to that analysis. And specifically, is the DTC upside that you described today, the idea that EBITDA will be $1 billion better than previously expected in '23, incremental to the math I just laid out?

Peter, again, I -- in the current environment, I wouldn't characterize anything as easy. But I have very, very high confidence in the range that we laid out. We have confidence in the ability to generate these synergies. You're right on the trailing 12-month number. But it's a lot of work. We have line of sight. And we'll take it from there. I don't want you to take this as an upgrade to our cash flow guidance.

We were the -- I think we were among the first to say that the advertising market was facing -- was starting to be challenging. And so we have been pretty careful in projecting, because you can't, how an advertising market is going to turn and when it's going to turn. And so for purposes of how we looked at this year, the market is quite challenging. It's improved a little bit. But it still remains a really challenging environment. But the good news for us is we built that into our projections for the year and into how we talk to you about what this -- what we'll face this year and how we'll perform.

Your next question comes from the line of Bryan Kraft with Deutsche Bank.

I wanted to ask you about Hogwarts Legacy. Sales have obviously been extremely strong to date. Can you talk about what you expect for sales of the PS4 and Xbox One versions, which I think become available today? Maybe just relative to sales to date, how much of a lift could you get? And also, I wanted to ask how the next, say, x hundreds of millions of dollars of sales would be -- would look from a margin perspective relative to that first $1 billion. Because I would assume that there's a lot less marketing and amortization running through in the second quarter and beyond. So I just wanted to ask about that as we think about profitability for the Studios going forward.

Thanks, Bryan. We have a very good gaming business with 11 different studios and a real talented capability. But the real differentiator for us as a company is we own our IP. And that IP belongs to us. And we're developing it. In some cases, we may decide to develop it with a third-party game technology company. But we may be the only media company that owns, whether it's the DC Universe, Harry Potter, all the content that we own, Game of Thrones, that's for us to deploy. And I think that's particularly strategically important. Because if you look at Hogwarts Legacy, a big piece of the success of that game is you go into it. If you're a player, you go into that game and you're in that world, that's kind of a new concept. Before it was really -- it was gaming and it was storytelling. And now I don't -- it's very difficult to figure out what anyone's definition for the metaverse is. But when we launch a product as a motion picture or a long-form story on Max or HBO and then we have a game, that game belongs to us. But now there's this tweener, which is it may be in the next couple of years that we launch our Superman movie and then people spend more time and there's more economics of people just hanging out in the Superman world and universe. And the fact that we own all that is something that I think is going to be really important as we look for -- as whether with -- as technology develops and given the amount of time people spend on gaming, we don't want to be in the motion picture and story -- and long-form storytelling business and have somebody else in the business of hanging out in those worlds. Because those worlds, I think, are going to be quite profitable in the years ahead.

And Bryan, to the Hogwarts Legacy, obviously, the Gen 8 release that's going out, you're right, today is important. I would say, obviously those consoles are a much smaller base than the current generation consoles that we released back in February. So it's obviously a much smaller portion of the whole but nonetheless important. I think the other big call-out is obviously the Nintendo Switch release, which will come later this year. We see that as probably a much bigger installed base and a fan base that -- as it relates to the franchise of Harry Potter, which obviously appeals to a very big audience globally and a more -- and in markets like Japan, where Nintendo has a big footprint and Harry Potter skews very strongly in terms of popularity. We see a much bigger upside probably from that release certainly than the Gen 8. So that's kind of how we see the rollout over the next few months.

And the margin profile, Bryan, is not going to change materially. We'll be a little lighter on marketing. Obviously, retail price points are a little lower. So maybe from a gross margin perspective, a little bit of a headwind but no material change.

Your next question comes from the line of Jessica Reif Ehrlich with Bank of America Securities.

Two questions. So David, if you step back and think about the last year, where you -- the heavy lifting is done, the integration, the restructuring. And now the focus is on operating and building your businesses. Where do you see the most opportunity? And maybe you can touch on timing beyond the existing business. You touched on games, but I'm sure there's a bigger business plan. FAST, you've mentioned in the past, you're talking about driving your franchises deeper. In animation, you just mentioned you hired a Head of Animation. So -- and that's a huge driver for Universal. So maybe if you could -- maybe there's something I'm missing. And then secondly, on sports, you kind of alluded to it coming to Max. I don't know if you can say anything more about that and maybe touch on the NBA. What do you think the timing is and ways to slice -- are there ways to slice and dice the rates among the various players so that you ensure it's a profitable contract in the next round?

There's -- when we look at this business, you're exactly right, we reset the business for the future by looking at each company and saying, "Well, what should this -- how should we be structured to have the best chance for sustainable growth in the -- today?" We took out a lot of layers. We built a new leadership team. But we still have a lot of the benefits that will be flowing through this year and next year. And we're still finding -- we're still opening up some closets and stuff falls out, which I think is a good thing, more opportunity. And we've got some businesses that aren't doing well. Warner Bros. turns 100. And they've had 2 of the worst years of -- if you look back at Warner Bros., it was really just very difficult, very difficult on every level in terms of what was turned out. And so we think we've turned the corner on that. We've got a very strong leadership team in place now. We've got James Gunn and Peter working very hard on DC, which is going to be a very big growth driver for this company and so very bullish on DC. And the Superman script, the first draft is done. Gunn is -- he's on a mission from God. And I think it's a really good moment for us to prove out on DC what we got and how strong it is globally for long-term sustainable growth. We got some more movies coming up that are better. We've been working hard on fixing them and enhancing them and investing. We said no movie before it's time. And with Barbie and Flash, we have two very good movies, Dune 2, very strong. And so I think the slate coming up now,…

The NBA.

The NBA. Look, I was just -- saw Adam 2 days ago at the Knicks game. Go Knicks, big night at The Garden. Wow, I've been waiting a long time for that one and -- but we're doing a terrific job with the NBA. When you look at Barkley and Ernie and that team and Shaq, the programming we're putting on, we're setting records with the NBA. We're setting records with hockey. We also have March Madness, where we did very well. We couldn't do as well with the marketplace because sports is relatively strong. But sports used to be strong enough that it was also able to help you with the rest of the business. And that was happening for a long time. And the market was just quite soft. And so we're able to take advantage of the sport. But we weren't able to take advantage of the piggyback halo. And I think that's true in the industry. It just got more difficult. But between baseball playoffs, March Madness, hockey, we have long-term deals that are quite favorable to us. We like the NBA. The deal is coming up in '25. There's lots of ways that could be reconjugated. We did a very favorable deal in the U.K. with our BT/Eurosport business, where we ended up with 90% of the football -- the soccer games and Amazon got less than 10% of the Champions League games. We produce that content for Andy Jassy. And they promote to us, we promote to them. And the economics of that deal were very favorable for us. And so there's lots of ways to reconjugate it. We like the NBA. We hope we can get there. But we're going to be very disciplined. We work very hard to build this company to drive profitability, to have a strong balance sheet, to provide real growth and real free cash flow. That's the long-term sustainable nature of this great company. And we're not going to jeopardize that for any piece of IP.

I'd like to add one slightly less strategic, more operational point that, nonetheless, I think is super important, Jessica. And that is our -- for the sake of the argument, we're spending $20 billion of content. A lot of that still goes through siloed systems, still imperfect processes. And in many cases, still through a mindset that's very business unit-oriented. So I have no doubt we're in the very early innings of looking at this as one Warner Bros. Discovery content. And we talk a lot about the stuff that we discontinued because it didn't make sense financially. I think the opposite is true as well. I think the company also passed on very, very interesting and attractive investment opportunities just because some intercompany budget wasn't in place. And so all of that is going to change. We'll get much better in allocating capital as a company. And we'll get much better in the day-to-day operational management of spending of that cash. We just harmonized those processes and centralized those teams that were all fragmented. So looking at that, the ROI on our capital, in the ballpark of $20 billion, hopefully growing over the next few years, is set to improve. And I have full conviction in that.

When we talk about a marketing campaign, one of the things to bear in mind is we're using our platforms now. That wasn't happening in -- we are really hyper-focused. As I said, on many nights now, we're getting 48%, 45%, close to 50% of all viewership, broadcast, cable. On any given night, we have 25% to 30% of viewership on the platform. And using that, using Bleacher and House of Highlights, which has a very young demo, using CNN.com, so yes, we're -- the campaigns are bigger. But we're one company. And so the ability to promote on HBO on our own platform is a big savings. It's a big savings for us internationally. And we're deploying it.

Your last question comes from the line of Matthew Thornton with Truist Securities.

Maybe a couple on Max, if I could. Could you update us just how you were thinking about migration later this month, just in terms of any friction as folks go from one app to the next, just your latest thoughts on any potential friction there and how you're managing that? Secondly, you talked about the overlap of discovery+ users that also have HBO Max. What about those that don't and how you're attacking and trying to up-sell those to the more -- the higher price point Max service? Any color there? And then just final one, just I think this was mentioned on a prior question, but any thoughts around FAST here, just how to think about FAST here around Max to help drive top of funnel, help drive advertising, help monetize deep library? Any incremental updated color there would be great as well.

Yes. Thanks, Matthew. Just on the migration point first, a couple of things. Number one is, remember, there's been no change in the billing process. So as it relates to revenue, there is no change and there's no migration as it relates to billings. So revenue and billing continues to be exactly the same, irrespective of whether somebody has actually "migrated", i.e., accepted the new app or downloaded the new app if they need to. Number two is, as we said at the April 12 event, there's a large portion of the base that will have to do absolutely nothing, where the app will automatically convert. And upon streaming again, you will have accepted the terms of use and you'll be off and running. For the portion of the base that actually has to download or re-download, we've done everything we can to make it as seamless as possible, including not having to input -- basically, it will be two clicks to get to the -- to streaming again your video content. You have no need to -- your username and password will all be migrated, your watch list. All your history will be migrated. And so we tried to make everything as possible. Now inevitably, in these processes, you're going to find some friction. But we think it's fairly limited in terms of the subscriber risk associated to the migration. And so we feel very good going into it. We've tested it. We're all ready for the migration. And the flip side is on then switching to the discovery+. As Gunnar said, we do see about 4 million subs largely in the U.S., but there's some of that internationally as well that overlap between the two services. And obviously, we're going to be doing everything we can to up-sell…

Great. I think that's it. Thank you very much for joining, and we will speak with you soon.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect your lines.