By Gavin Boyle
When Warner Bros. Discovery (WBD) released its Q2 earnings last week, the company revealed strong streaming and theatrical performances, while its linear TV business continues to struggle.
“We’ve had an extraordinary run,” said WBD CEO David Zaslav. “You know we were in last place and together we went from last to first. You know, Disney is a little bit ahead right now…But we’re really making the turn.”
The company’s studio revenue hit $3.8 billion during the quarter thanks to the success of A MINECRAFT MOVIE, SUPERMAN and F1. Meanwhile HBO Max added 3.4 million subscribers, largely fueled by the expansion into multiple overseas markets. WBD’s linear TV assets, however, continued to struggle with revenue, down 9% year-over-year along with significant cord cutting.
The difference in performance between these parts of the company highlight the significant shift that will occur when Warner Bros. Discovery splits into two distinct companies in the near future. When that split is complete, Warner Bros. will control the streaming and studio assets, while Discovery will take over the linear TV assets. As Warner Bros. looks to boost its streaming profitability, it has committed to simplifying the experience, while consolidating its IP into one place.
“A big piece of this will be cleaning up the consumer experience,” Zaslav said about Warner Bros.’s future. “I expect that we’ll look at this business four or five years from now and it won’t be 18 [apps] and I think the companies that are most successful will be global.”
Related: Investors Unsure of Warner Bros. Discovery’s Future
“It’s just better together. Some of it will be the result of consolidation in some markets, and some of it will be white flags – I don’t want to lose money anymore and I want to get back to what a lot of companies want to get back to, what the do, which is just produce content and leave the global direct-to-consumer fight to others,” he continued.
As for the future of Discovery, the company believes that with its sports offerings at the center, it still has a chance to turn things around.
“We’ve got a very, very strong (sports) portfolio, all the key franchises. And it’s going to be even more important as we look at Discovery Global as a separate, standalone entity,” said WBD CFO Gunnar Wiedenfels.
While the upcoming split will allow the two separate companies to enact different strategies and pursue success in different ways, the weight of linear TV is still dragging WBD down, as it will likely continue to do until the split is finalized.
Read Next: Warner Bros. Discovery Finally Splits
Questions or comments? Please write to us here.
- Content: +2Share:
- Content: +1