Warner Bros. Discovery reports streaming profits despite overall losses

For the first time ever, streaming at Warner Bros. Discovery is turning a profit—even if the rest of the company isn’t.

Unlike Peacock, which reported a $704 million loss, and Paramount, which reported a $511 million streaming loss, Warner Bros. Discovery reported a $50 million profit in its streaming-services division in the first quarter of 2023. Better yet, the company expects its streaming business to turn a profit this year, a year ahead of schedule, CEO David Zaslav told investors.

In line with past earnings, the company reported continued growth in its global subscriber base, adding 1.6 million subscribers and ending the quarter with 97.6 million total subscribers. On Friday’s earnings call, CFO Gunnar Wiedenfels attributed growth “in part due to the strong creative success of The Last of Us.”

But…Even with streaming doing well, the company overall reported a net loss of $1.1 billion last quarter, with Zaslav attributing it to “challenging revenue headwinds mainly on the linear TV and studio sides.”

New identity incoming: With the Discovery+ and HBO Max rebrand to Max set to roll out on May 23, Wiedenfels noted that the company is investing in the largest marketing campaign in the company’s history, which will run on company-owned outlets like US cable networks, CNN.com and Bleacher Report. Meanwhile, the company is “leaning in” on the buzz around upcoming films like Barbie and The Flash with marketing spend that they expect to see a return on in Q3, Wiedenfels said.

Regarding the decision to not change subscription prices as part of the rebrand, Zaslav said the company wants “an easy, smooth transition.” On the ad sales side, Zaslav highlighted new advertising opportunities on HBO originals, like Mercedes Benz’s title sponsorship of Succession, and Wiedenfels said the company sees “a particularly strong advertising opportunity” with traditional ads on shows like Friends.

The kids are all write? Despite touting the company’s content line-up, no one on the earnings call brought up the elephant in the room: the WGA writers’ strike, which hinges on increasing payouts from streaming projects (among other things.) Beyond that, Warner Bros. Discovery has faced backlash for pulling shows and movies from HBO Max as a cost-cutting measure.

WGA protests took place outside of Peacock’s NewFront presentation on Tuesday. Warner Bros. Discovery’s Upfront presentation is set to take place on May 17.