Healthy investments in Warner Bros Discovery’s (WBD) overseas direct-to-consumer business helped grow subscribers to its streaming services Max and Discovery Plus during the third financial quarter (Q3) of the year, the company revealed on Thursday.
Global net subscribers to WBD’s various streaming services came in at 110.5 million during Q3, representing a net addition of 7.2 million customers — better than what Wall Street analysts had predicted, which was 6.1 million customer additions.
In the United States and Canada, WBD added just 200,000 subscribers, indicating a maturing of its streaming offerings locally and suggesting the service might have peaked in terms of growth — but not necessarily in terms of revenue.
Price adjustments in more-mature markets helped WBD squeeze $2.6 billion out of its customers, a 9 percent increase compared to Q3 2023. Profit attributed to WBD’s streaming businesses was $289 million for the quarter, up from the $111 million in profit earned around this time last year.
Overall revenue came in at $9.62 billion, slightly lower than the $9.8 billion Wall Street analysts had expected, and 3 percent lower than the $9.98 billion earned during Q3 2023. Despite gains in WBD’s streaming-based advertising unit, the overall advertising market continues to be soft for traditional TV networks — WBD owns one of the largest portfolios of cable channels, ranging from CNN, Food Network and Animal Planet to Cartoon Network, TBS and TNT — with ad revenue attributed to its networks business earning $1.5 billion during the quarter, down 13 percent.
Distribution revenue, or fees collected from cable and satellite companies, also fell 7 percent to $2.6 billion as pay TV companies continue to erode customers. WBD sought to make up the difference by participating in Venu Sports, a sports-focused streaming joint venture with the Walt Disney Company and Fox Corporation, but plans to launch the service in the fall were put on pause after former distribution partner Fubo sued on antitrust grounds and successfully obtained a preliminary injunction against the trio. The case remains pending, and is scheduled to go to trial in late 2025.
For the moment, WBD remains focused on building out the streaming services it can control and which are already on the market in most parts of the world, including Max, which is becoming a bigger priority for the company. Currently, Max is available in 65 countries and territories around the world, and is set to debut in Southeast Asia, Taiwan and Hong Kong later this month.
On a conference call with investors, WBD executives said they’re increasingly interested in bundling Max with other streaming services, similar to their partnership with Disney, which offers the product as a package deal with Disney Plus and Hulu.
When it comes to that bundle, WBD CEO David Zaslav said there was “a lot of strength” in the offering, and that “subscriber growth is significant, and the consumer satisfaction is quite high.” In the future, Zaslav would like to see bundles that not only offer various services, including WBD’s, at attractive price points, but also platforms where the transition to and from Max’s content library is seamless.
