Warner Bros Discovery (WBD) saw its global streaming subscriber count rise to just over 122 million during the first three months (Q1) of the year, a bright spot in what was otherwise a mixed report of the company’s financial earnings for the period that ended in March.
Total revenue from throughout WBD’s global media and entertainment businesses dropped 9 percent on a year-over basis to $9 billion, weighed down by lower advertising, fewer cable TV viewers and a subsequent dip in distribution fees.
Global advertising revenue was $1.98 billion, down 8 percent from the $2.16 billion earned during Q1 2024.
The firm’s streaming ad revenue increased 35 percent to $237 million as more TV and film fans took advantage of lower-priced tiers of Max and Discovery Plus in the U.S. and other parts of the world.
Television network ad revenue was down 12 percent to $1.76 billion, the result of marketers pulling back on their ad spending against WBD-owned cable networks. WBD said its sports-inclusive channels like TNT continue to see strong viewership, but its lifestyle and news networks suffered from audience drops, which caused marketers to buy inventory elsewhere.
Distribution fees charged to cable and satellite companies clocked in at $2.56 billion, down 9 percent, the result of higher churn in the traditional pay TV space that wasn’t fully offset by consumers switching to streaming cable TV alternatives, Max or Discovery Plus.
On the streaming side, subscriber revenue accounted for $2.57 billion, up 9 percent, which the company attributed to its continued expansion of Max in other parts of the world and higher interest in the Max Basic with Ads tier in select territories.
Domestic streaming average revenue per user (ARPU) was $11.15, down 5 percent compared to Q1 2024. The company said its integration of Max Basic with Ads within some newer pay TV bundles was to blame for customers churning out of direct billing and opting instead to watch Max content with their pay TV subscriptions. DirecTV and Charter are two of the companies offering Max Basic with Ads as an included feature within some of its newer, lower-cost pay TV packages.
Revenue attributed to WBD’s film and TV studio business was $2.314 billion, down 18 percent, a direct result of lower interest in theatrical releases compared with Q1 2024 when WBD offered “Dune: Part 2” and a new Godzilla and King Kong film, as well as home releases of “Wonka” and “Aquaman and the Lost Kingdom.”
