Warner Bros Discovery (WBD) president and CEO David Zaslav said during a Q1 earnings call on Friday that he expected the company’s US streaming business to be profitable in 2023, one year ahead of schedule.
The company reported $50m profit in EBITDA for the streaming operation, a timely turnaround in light of losses in prior quarters. Zaslav said in a call with analysts that the US streaming business is no longer “bleeding”. He also stressed that reducing churn, a term for subscribers who leave the service, was a top priority. The two platforms are being combined as Max and the single service is scheduled to launch in the US on May 23, followed by international roll-out.
Streaming revenue reached $2.46bn, a 1% decrease on the year-ago quarter. Advertising revenue grew by 29% driven chiefly by subscriber growth on ad-supported tiers, while content revenue dropped 16% due to lower third-part licensing of HBO content.
Overall financials were disappointing as WBD reported a $1.069bn net loss compared to a $456m profit in the year-ago quarter. Shares dipped before rallying by several points by mid-afternoon.
Zaslav has said the worst of the restructuring since last year’s $43bn acquisition of WarnerMedia is behind it and the company is aiming to shave off $4bn in costs post merger.
WBD revenues for the quarter came in roughly as expected at $10.7bn marking a 5% year-on-year quarterly drop. Analysts had predicted a loss per share of 5 cents, compared to the 69 cents profit per share in the previous period. It lost $930m in free cash flow which it attributed mostly to interest payments and sports media rights payments.
Turning to the studio segment, quarterly revenue of $3.21bn dropped 7% against the year-ago quarter. Theatrical revenues were lower than last year when
The Bat
was a hit. The company reported that the launch of Hogwarts Legacy in Q1 was the biggest release ever for Warner Bros. Games. We need to get the entire industry working together, and everyone deserves to be compensated fairly. Let’s tell great stories together.”
On Thursday Paramount Global stock plunged more than 25% after the company announced weak Q1 results and missed analysts’ earnings and revenue forecast.Hollywood studios, streamers break silence over WGA talks
