Warner Bros Discovery missed revenue expectations as the media giant reported a 7% year-on-year drop to $9.9bn, however there were positive signs in the streaming business.
Streaming revenues stayed relatively flat at $2.5bn while profit reached $86m compared to $50m in the year-ago period. Advertising revenue climbed 70% to $175m.
The number of global subscribers increased by 1.9million to 99.6m and North American membership climbed by 700,000 to $52.7m. Average revenue per user declined marginally worldwide to $7.83 and it was the same story in North America where the number is $11.72.
Film studios revenue dropped 12% to $2.8bn. Highlights from the quarter were Dune: Part Two and Godzilla x Kong: The New Empire which together have grossed more than $1.2bn at the global box office since release. Dune: Part Two is the highest grossing film of 2024 to date on more than $700m worldwide.
On Wednesday Warner Bros and Disney announced they will launch a Disney+, Hulu and Max bundle later this year. CEO David Zaslav is bullish on bundling and said the bundle would be “priced well and will be ad light and on ad free”.
Zaslav noted the bundle was a strategy to fight customer churn, which he called “the killer in this business”.
Revenues in the TV segment dropped 8% to $5.1bn and advertising fell 11% to $1.9bn, highlighting ongoing challenges in the linear television.
Overall WBD reported net loss of $966m, marking an improvement over the same period last year and equating to a loss per share of 40 cents compared to 44 cents a year ago.
EBITDA was $2.1bn, down 20% on Q1 2023, which the company said was primarily due to lower revenues from video game Suicide Squad: Kill The Justice League compared to those of Hogwarts Legacy last year.
Free cash flow swung to $390m compared to cash flow negative $980m last year.
The company said it repaid some $1.1bn in debt in Q1 as it continues to chip away at its $43.2bn debt load.
Earlier on Thursday it was announced that Andy Serkis will direct and star in The Lord Of The Rings: The Hunt For Gollum, which the studio has earmarked for release in 2026.
WBD is also hoping to renew its rights to stream NBA basketball after reports emerged it may lose them to NBCUniversal.
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