‘House of the Dragon’ Won’t Keep Warner Bros. Discovery From Dragging

Illustration of the House of the
Illustration: VIP+: Adobe Stock

David Zaslav must be hoping dragon fire can distract from the other fires burning at Warner Bros. Discovery right now.

HBO’s “Game of Thrones” prequel/spinoff “House of the Dragon” launched Sunday to much fanfare, racking up nearly 10 million viewers across linear and streaming on the night of its premiere, according to the network. While the ratings unsurprisingly fell short of “Game of Thrones” at its peak, they far outstripped same-day viewership for recent HBO hits such as “Euphoria” and “Succession.”

And the numbers will grow substantially in the weeks to come: HBO expects that same-day viewership will ultimately account for only 20 to 40 percent of “the show’s total gross audience.” In other words, a lot more people will catch up with “House of the Dragon” later on HBO Max. But the 10 million figure is already enough to make the first episode of “Dragon” the most watched series premiere in the history of HBO, as the network’s press release proudly declared.

Unfortunately, Wall Street didn’t seem to take much notice. WBD’s stock is still down almost 50 percent from April, when the merger closed; the share price has not topped $14 in more than two weeks. The company’s market cap has also plunged $30 billion since April, a 51 percent drop, staggering even amid this year’s brutal market cap declines.

It’s instructive to compare this to Netflix’s stock, which rose more than 15 percent in the lead-up to and days following “Stranger Things” Season 4’s premiere and record-breaking viewership on the service. A similar bump for “House of the Dragon” has yet to materialize.

Of course, it’s not hard to pinpoint why. Netflix’s recent turmoil aside, the streamer is in a much healthier position than WBD, which is burdened with about $55 billion in debt and posted a $3 billion loss for the first half of the year. Netflix co-CEOs Reed Hastings and Ted Sarandos have also managed to regain control of their narrative as far as the Street is concerned, spinning Q2’s second consecutive subscriber loss into a win by overestimating the decline and confidently projecting a return to growth in Q3.

WBD, on the other hand, is hardly projecting confidence. The week before “House of the Dragon” premiered, the company slashed the price of an annual HBO Max subscription by 30 percent, a rare promotional discount in the streaming age. It’s a clear sign leadership is nervous that many new subscribers coming for “Dragon” will churn out after the show’s first season ends.

And it's a somewhat valid concern, given the negative buzz around HBO Max of late. After the already infamous “Batgirl” debacle, CEO Zaslav’s slash-and-burn approach to cost-cutting has led to a wave of titles — mostly Max originals and Warner library titles — being pulled from the service to save money on residual payments.

The titles are purportedly among HBO Max’s least watched content, but the lack of viewing data available makes verifying this difficult, and the strategy is palpably alienating creatives and fans of the content in question.

WBD seemed to anticipate the move would spark backlash: The timing of the annual-plan discount coincided not just with the “Dragon” premiere but the announcement of many titles’ impending removal. HBO Max leadership is likely dreading a subscriber loss as a result of the Great Zaslav Purge, and hoping the discount will stem such a loss.

Those fears may be overblown; the strong ratings for “House of the Dragon” after the “Game of Thrones” divisive final season have once again proven the discrepancy between social media chatter and actual public opinion. But the fact is that WBD is failing miserably at the PR game while also failing to impress Wall Street, and a big hit for HBO doesn’t seem likely to help much. If Zaslav wants to change WBD’s narrative, he’ll need to change the way he’s currently steering it.