When it comes to subscription video-on-demand (SVOD) numbers, Warner Bros. Discovery (WBD -1.07%) has long lagged behind its streaming rivals Netflix and Walt Disney. Netflix has just north of 230 million subscribers, while Disney counts around 235 million across Disney+, ESPN+, and Hulu. By contrast, Warner Bros. Discovery's HBO Max and Discovery+ platforms have a little over 96 million users combined.

Now, Warner Bros. Discovery is looking to take more direct aim at its competition with a rebrand for its main streaming offering, accompanied by a new pricing structure. Here's what's going on and how it might help Warner Bros. Discovery catch up with the pack leaders.

A more family-centric brand

HBO has been around for more than 50 years. Over that time the brand has established itself as a notable purveyor of high-quality television programming; indeed, three of the company's shows currently rank in the top 10 of IMDB's Top Rated TV Shows list.

In May 2020, WarnerMedia (a precursor to Warner Bros. Discovery) launched HBO Max with the tag line "Where HBO meets so much more." However, three years on, Warner Bros. Discovery has decided the HBO branding no longer works for its streaming ambitions.

During a launch event last week, JB Perrette, Warner Bros. Discovery's president and CEO of streaming, explained that, starting May 23, HBO Max would become simply Max. Discussing the decision to drop the legacy name from its premier streaming platform, Perrette noted the HBO brand had long been viewed as an "edgy, ground-breaking trend-setter" that made prestige content for adults. Perrette suggested such a brand was not a natural fit for a family-oriented service that also pulls in content previously found on Discovery+.

Perrette continued:

HBO is not TV. HBO is HBO. It needs to stay that way. We will not push it to the breaking point by forcing it to take on the full breadth of this new content proposition had we kept the name in the service brand. By doing so, we'll better elevate and showcase our unparalleled array of other content and brands that will be key to broadening the appeal [of Max].

New pricing and fresh opportunities

Along with the rebrand, Warner Bros. Discovery also announced Max would be available in three tiers -- a $9.99-a-month HD ad-supported plan, a $15.99 HD ad-free plan, and an all-new $19.99 4K ad-free plan. For Warner Bros. Discovery stakeholders, the addition of a new premium plan could lead to a bump in streaming revenue.

According to a 2018 study, approximately 30% of Netflix customers pay for the company's $19.99-a-month Premium tier, giving them access to multiple concurrent streams in 4K. Last year, Walt Disney said 40% of customers are signed up to its $19.99 a month Disney Bundle, which lets them enjoy ad-free Disney+, ad-free Hulu, and ESPN+. With these figures in mind, investors will surely be watching Warner Bros. Discovery to see if it can do the same with the new high-end Max tier.

Growth is slowing

While Warner Bros. Discovery is seemingly making all the right moves, it's important to note the company still hasn't made a profit from its SVOD operations. And when factoring in the recent dips in viewership rates for Netflix along with slower growth for the streaming industry as a whole, some investors may question whether Warner Bros. Discovery is doing enough with a family-friendly rebrand and new pricing structure.

Those interested in Warner Bros. Discovery as a stock prospect should pay attention to the company's next quarterly results, scheduled for later this month. It should provide some insight into what the company hopes to achieve with its Max product, and perhaps how it might entice people to sign up for its $19.99 tier. After all, now that the company is matching Netflix and Disney on price, stakeholders will surely want to see it take market share from its rivals.