Warner Bros Discovery (WBD) ended last year with nearly 98 million direct-to-consumer streaming subscribers last year, and became the first major studio brand to swing its streaming service to a full-year profit.
On Friday, WBD reported revenue of $10.28 billion, slightly lower than the $10.35 billion expected by Wall Street analysts. Its overall loss per share clocked in at 16 cents, higher than Wall Street estimates of 7 cents.
WBD’s fourth quarter (Q4) loss logged in at $400 million, weighed down by lower revenue from its studio business and a continued slump in television advertising sold against its linear cable networks.
“This business is not without its challenges,” WBD CEO David Zaslav affirmed on a conference call with investors and reporters on Friday. “We continue to face the impacts of ongoing disruption in the pay TV ecosystem and a dislocated, linear advertising ecosystem. We are challenging our leaders to find innovative solutions.”
Still, the loss was reduced from the $2.1 billion WBD reported during the same period last year. And the company’s streaming business appeared to be doing well, with WBD counting 97.7 million streaming subscribers across its various properties — Max, HBO Max (in countries where Max has yet to launch) and Discovery Plus, among others. The figure is 2 percent higher compared to 2022.
Executives attributed WBD’s streaming growth to more customers taking on the ad-supported version of Max, which costs $10 per month and allows the company to diversify its direct-to-consumer revenue beyond subscription sales.
The company’s overall streaming revenue grew to $2.5 billion during Q4, bolstered by additional international expansions of Max, including its ad-lite tier; new distribution partnerships with cable and satellite companies that push customers toward Max and other WBD streaming services; and price increases in the United States and some other regions.
On Friday, executives said Max’s ad-supported tier will be available in nearly four dozen countries by the end of the year. Currently, the ad-supported Max plan is only available in the United States.
For 2024, streaming revenue rose to $10.2 billion, or 5 percent higher compared to the prior year. Executives said the company’s willingness to license some content to third parties helped boost its direct-to-consumer revenue. Among other things, WBD agreed to launch several free, ad-supported streaming television, or FAST, channels that are now distributed by Fox Corporation’s Tubi, Amazon’s Freevee and The Roku Channel, among other platforms.
The company is focused on developing a new sports-centric streaming service as part of a joint venture with Fox Corporation and the Walt Disney Company’s ESPN, with cursory plans announced earlier this month. On Friday, WBD executives affirmed Max subscribers will be able to bundle the service when it debuts later this year.
The sports streaming service still has yet to be named, and is facing a legal challenge brought by Fubo.
