New York City – Warner Bros. Discovery released their first-quarter earnings report on Thursday, falling short of expectations both in revenue and profit. The company experienced a 7% decrease in revenue compared to the previous year, reporting $9.96 billion instead of the anticipated $10.27 billion. While there was an improvement in free cash flow due to cost-cutting measures, the company’s linear TV business continued to decline.
Network advertising revenue took a hit, falling by 11% from the same period last year. Warner Bros. Discovery also faced challenges in its studios business, with underperforming segments like “Suicide Squad: Kill the Justice League.” Despite these hurdles, the company reported growth in its streaming division, adding 2 million Max subscribers during the quarter.
The direct-to-consumer streaming business showed promise, exceeding expectations with 2 million new subscribers. Additionally, streaming advertising revenue saw a significant increase, jumping to $175 million, a 70% rise from the previous year. The DTC division also turned a profit at $86 million, marking a $36 million improvement from last year.
Investors are keeping a close eye on Warner Bros. Discovery’s upcoming sports streaming partnership with Disney and Fox, as well as the expansion of its Max streaming service to international markets. The company is exploring further cost-cutting measures and potential price hikes in the streaming sector. CEO David Zaslav remained optimistic about ongoing negotiations with the NBA, emphasizing the company’s commitment to quality content.
Looking ahead, Warner Bros. Discovery faces challenges in the media landscape, with talks of potential layoffs and strategic acquisitions. Despite the uncertainties, the company is focused on maximizing its current assets and operations. The post-merger lockup period has ended, opening doors for new opportunities and partnerships in the industry. Warner Bros. Discovery continues to navigate the evolving media landscape as it strives for growth and sustainability.