Investors Unsure of Warner Bros. Discovery’s Future

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Investors Unsure of Warner Bros. Discovery’s Future

By Movieguide® Contributor

Warner Bros. Discovery’s stock price fell 10% following the release of its Q4 report despite the company’s CEO, David Zaslav, painting a bright future for the conglomerate.

The media conglomerate’s Q4 report revealed the depth of the impact of the writers’ and actors’ strikes, resulting in a 30% decline in adjusted earnings and a 9% drop in revenue for the studio.

“This business is not without its challenges,” Zaslav said during an earnings call. “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.”

Along with the strike eating into Warner Bros.’s bottom line, the company’s streaming service, Max, also offered disappointing results. While it significantly improved its year-over-year quarterly loss ($217 million during Q4 2022), the streaming platform still posted a loss of $55 million for Q4 2023. Furthermore, its subscriber numbers failed to deliver as Max saw a global increase of subscribers amounting to less than 1 million overall in 2023, while it dropped roughly 2.5 million domestically over the same time.

Given the difficulties Max has found in continuing momentum since its launch, Warner Bros. Discovery now plans to bundle it with other services in the future to increase its reach.

“I expect that there will be meaningful bundling,” Zaslav said. “It’s going to happen in one of two ways. It’ll either be a bundling by an intermediary – a platform like Apple or Amazon or Roku, or you know what’s going on with Charter and Comcast [with their Xumo streaming box] which is very compelling and very helpful to all of us in the content business… Or we could do it ourselves. And I’ve always advocated that we should do it ourselves.”

“We’re able to go after those that we’re missing. We’re missing those subscribers. The traditional cable industry is missing those subscribers. We think it’s very pro-consumer,” Zaslav added about a sport’s specific streaming bundle that would include Warner Bros.’s TNT and TBS along with ESPN and Fox Sports.

Zaslav showed further optimism about the future of the company based on its lineup of content slated to be released during the next two years. Some of the company’s most popular IPs will be reintroduced, including a Harry Potter TV series and a sequel to JOKER before the revitalization of the DC universe.

“We feel like we’re on a great trajectory,” Zaslav said. “The content lineup over the next two-plus years on Max is rich, the deepest and broadest that I think we will ever have… We’re going to be rolling out all these franchises and shows over the next 12 to 24 months and it gives us a real sense of optimism.”

Movieguide® previously reported:

Disney, Warners Bros. and Fox announced that they are joining forces to create a single sports streaming bundle.

Disney CEO Bob Iger said that the entertainment industry will take “an important step forward” with this new move.

Per CNBC, “From Disney, that includes ESPN and its sister networks, such as ESPN2, ESPNU, SECN, ACCN, ESPNEWS, as well as the ABC broadcast network. Warner Bros. Discovery’s networks that showcase sports are TNT, TBS and TruTV. Fox will include the Fox broadcast station along with FS1, FS2 and BTN.”

“This is obviously a nice, positive step for fans,” media industry analyst Rich Greenfield, a co-founder of LightShed Partners, said.

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