Warner Bros. Discovery Is Knocking on the Door of 100 Million Direct-to-Consumer Subscribers
Warner Bros. Discovery added 2 million direct-to-consumer (DTC) subscribers in the first quarter of 2024. It now has a total of 99.6 million DTC subscribers across Max, linear HBO (yes, it still exists), Discovery+, and some relatively small international streamers you’ve never heard of — don’t worry about those.
It’s just the second straight quarter of a return to DTC-subscriber growth after three straight quarters of losses. The combination of HBO Max and Discovery+ was bound to cannibalize some subscriptions in the early going, and that is exactly what it did.
The company’s DTC business made an $86 million profit in the recently ended January-to-March quarter. David Zaslav, the WBD president and CEO, shorthands that segment to “streaming,” so you can too — but anyone who gets the HBO channel through their cable provider is counted there as well.
Warner Bros. Discovery, itself the combination of Discovery, Inc. and AT&T’s former WarnerMedia wing, is a bit more than two years old now. The consolidation created a gigantic heap of debt. WBD paid down $1.1 billion of it in Q1 2024; $43.2 billion remains.
The company whiffed on Wall Street’s quarterly earnings estimates at both the top and bottom lines. WBD lost 40 cents per share vs. an estimated 24-cent loss; it posted less than $10 billion in total revenue vs. an analyst consensus $10.2 billion.
The Warner Bros. studio had some “Wonka” and “Aquaman and the Lost Kingdom” carryover for the quarter, but most crucially it released “Dune: Part Two” on March 1. WB also had exactly one opening weekend of “Godzilla vs. Kong: The New Empire” in Q1. (“Dune 2” and the new “Godzilla” film were both Legendary releases.)
“Dune: Part Two” has made more than $700 million at the global box office — it’s the biggest film, thus far, of 2024. Even with that, the Warner Bros. studio profit sunk 70 percent vs. the same quarter last year. Gaming is captured in the segment, and it was a tough comparison with last year’s huge “Harry Potter” video game vs. the current year’s disappointing “Suicide Squad” game that led the glaring decline.
HBO/Max in the quarter released “True Detective: Night Country” in January and Kate Winslet’s “The Regime” in March. “Curb Your Enthusiasm” wound down its incredible run in the quarter, though it actually ended one week into Q2. The ID network (and Max, where it was primarily consumed) had viral docuseries “Quiet on Set,” and the Turner channels hosted many March Madness games — linear is still the top platform for live sports.
Also of note in the quarter, Warner Bros. shut down digital-content company Rooster Teeth in March.
As previously announced, WBD, Fox, and Disney are planning to launch a joint venture sports-streaming service this fall. We do not yet have a name or a price point. Disney revealed its January-to-March earnings on Tuesday and Fox did on Wednesday, so those partners are not saying anything more about it anytime soon. Zaslav will get his turn to not say anything when Warner Bros. Discovery hosts a conference call with media analysts (and the media) this morning at 8 a.m. ET/5 a.m. PT.
But there is now something (arguably) more interesting to discuss in the streaming-partnerships space instead. On Wednesday, Disney, and Warner Bros. Discovery announced a new streaming bundle coming this summer that will combine Disney+, Hulu, and Max. (ESPN+, you can sit this one out.) We do not yet have a price point for the revolutionary new trio, which actually follows a duo Max already did with Verizon Wireless.
