Warner Bros Discovery, the newly formed company resulting from the merger of WarnerMedia and Discovery, has reported lower-than-expected quarterly revenue due to several high-profile box office failures. The launch of its streaming service, Max, showed promising growth, but was overshadowed by the underperformance of films like The Flash.
In the second quarter, Warner Bros Discovery recorded a revenue of $10.36bn (€9.5bn). This fell short of market estimates, as the company’s studio segment reported a revenue of $2.58bn, missing analysts’ expectations. The disappointing box office results of films like The Flash contributed to this shortfall. Additionally, the company incurred marketing costs for its successful Barbie film, which was released in July.
On the other hand, the company’s direct-to-consumer unit performed well, surpassing analysts’ estimates with a revenue of $2.73bn. However, it did experience a loss of 1.8 million subscribers, bringing the total global subscriber count for HBO, Max, and Discovery+ services to 95.8 million.
Warner Bros Discovery’s new streaming service, Max, was launched in the US during the quarter. This service combines scripted entertainment from HBO Max with reality shows from Discovery. Despite the challenges faced by the company in the box office segment, Warner Bros Discovery remains optimistic about its future prospects.
During a call with investors, the chief financial officer, Gunnar Wiedenfels, expressed confidence in the company’s ability to achieve $4bn in total synergies sooner than expected. He also outlined a “clear path” to achieving $5bn or more in total synergies through 2024 and beyond.
It is evident that Warner Bros Discovery’s focus is now shifting towards its streaming business, as it aims to strike the right balance between content spending and profitability. The company’s ability to leverage its extensive library of content, combined with its new streaming service, Max, will be crucial in driving future growth.
Overall, Warner Bros Discovery’s quarterly revenue may have fallen short of expectations, but the company remains determined to navigate the evolving media landscape and capitalize on the opportunities presented by the streaming industry. With its strong content portfolio and strategic initiatives, Warner Bros Discovery is well-positioned to adapt and thrive in the changing media landscape.