Following a shaky 2022 that was defined by content cuts and restructuring, Warner Bros. Discovery (WBD) has kicked off Q1 2023 with a promising upswing in its streaming business. The division posted US$50 million in profit this quarter, marking a strong recovery from its slight loss position of US$217 million in Q4 2022. 

Overall, the company earned US$10.7 billion in Q1 revenue, representing a 5% decline from the same period last year. WBD’s financial report, released today, showed a net loss of US$1.07 billion overall, with restructuring expenses coming in at US$95 million.

Globally, the number of combined subscribers for HBO, HBO Max and Discovery+ jumped to 97.6 million, compared to 90.6 million in the same period last year. And these services collectively added 1.6 million new subscribers this quarter. 

In a release, CEO David Zaslav said he expects DTC to remain profitable in the US throughout 2023, which he previously touted as a “year of building” for WBD. 

After axing several kids and animation titles last year, signs of renewed commitment to these genres have sprung up this quarter. Internationally, the company picked up Banijay’s Totally Spies! revival (26 x 22 minutes) to launch in EMEA, and WBD LatAm signed on as a co-pro partner for Zodiak Kids & Family’s upcoming Shasha & Milo series (25 x 22 minutes). 

WBD could be poised for growth this year, as it’s gearing up to launch the new “super-streamer” Max on May 23 in the US. While the ongoing writer’s strike may affect the content pipeline at all streamers, Max may have an advantage with its deep Discovery+ catalogue and late development lineup (which includes factual/reality content like The Zoo and Kiddie Kai.)

Kids industry execs previously told Kidscreen that naming the streamer Max, and dropping the HBO name, signals a push by WBD into targeting kids and families. With this move, the company aims to mine its family-friendly IPs for more content. The Wizarding World is a focus right now at the company, which has greenlit a series adapting the Harry Potter books for Max, coming on the heels of a new Hogwarts Legacy title from Warner Bros. Games. Since its release in February, the video game has generated more than US$1 billion in retail sales.

Despite that gaming success, content revenue is down at WBD, compared to Q1 2022, thanks to declines in TV licensing, theatrical rental and home entertainment. (This quarter, at the global box office, major release Shazam! Fury of the Gods only grossed US$133 million, falling under last year’s The Batman, which had earned US$360 million-plus at a similar point.) 

WBD’s content segment is expected to have a more profitable second quarter, thanks to major summer releases for kids and family audiences, including the first live-action Barbie movie in July, and comic book flicks such as The Flash (June) and Blue Beetle (August).

Featured image: Shazam! Fury of the Gods (top) and Hogwarts Legacy (below).