WBD posts US$86 million in Q1 streaming profit

Looking to squeeze even more out of this segment, the media giant is gearing up to roll out a streaming bundle this summer in partnership with Disney.
May 9, 2024

Warner Bros. Discovery released its Q1 earnings report this morning, coinciding with a news announcement that it has partnered with key competitor Disney on a new US streaming bundle that will include Disney+ Hulu and Max.

The company generated US$9.96 billion in revenue this quarter, which is a 7% drop from Q1 2023. But its net losses were also down by 10%, from US$1.07 billion to US$966 million.  

On the DTC front, WBD is very close to hitting a key milestone of 100 million global subscribers across all of its streaming platforms. Two million new subs were added this quarter, bringing the total to 99.6 million. At US$2.46 billion, revenue from this segment remained more or less flat over Q1 2023, with profits up by US$36 million to US$86 million.

Max debuted in the LatAm market this February as part of phase one of its international rollout. Then family feature Wonka (which also helped boost Q1 home entertainment revenue) landed on the streamer in March and was viewed by more than a million US households within its first three days, according to data from Samba TV. And finally, Investigation Discovery’s Quiet on Set docuseries became Max’s most-watched title reported by Nielsen, generating 1.25 billion minutes of watch time since launching in March.

Anticipated to further boost the company’s DTC profitability, the WBD/Disney streaming bundle is slated to launch sometime this summer in the US, featuring both ad-based and ad-free options. “[We] expect this product will help increase retention and lower churn, and thus support higher customer lifetime values,” said WBD CEO David Zaslav in an earnings call.

Meanwhile, the company’s studio segment generated US$2.82 billion in Q1 revenue, which is off by 12% from last year. Hollywood’s strikes are partially to blame, but so is the underperformance of video game Suicide Squad: Kill the Justice League. Zaslav underlined that the company is striving to “return the luster to Warner Bros. Pictures,” announcing that a new Lord of the Rings movie is in development for 2026. And among the kids & family features coming up on WBD’s slate are DC Studios’ Superman, a Minecraft feature, WB Animation’s The Day the Earth Blew Up: A Looney Tunes Movie and multiple films in partnership with Dr. Seuss Enterprises.

WBD also repaid US$1.1 billion in debt this quarter, finishing up with US$3.4 billion in cash on hand and US$43.2 billion in gross debt.

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