November 23, 2022

Warner Bros. Discovery Reports Third Quarter Results – The Hollywood Reporter

Warner Bros. Discovery now has 94.9 million combined subscribers across its streaming services, led by HBO Max and Discovery+, the company said in its quarterly earnings report Thursday. That’s up from 92.1 million last quarter. Wall Street expected a gain of about 3 million subscribers.

During the company’s earnings call, CEO David Zaslav said the combined streaming service will now launch in spring 2023, ahead of the original summer 2023 schedule. will aggressively attack” the ad-supported streaming market next year.

“We have a unique opportunity to grow our addressable market and drive value, and we intend to act quickly,” he said. “Stay tuned.”

There are “always a large number of people who do not want to pay”, he added.

The plan would be to leverage the company’s large library of TV and movies, with some licensing elsewhere (perhaps non-exclusively) to launch without needing to order new series.

WBD reported a profit of $9.8 billion and a loss of $2.3 billion, missing Wall Street expectations of $10.4 billion in revenue. The significant loss was primarily due to substantial restructuring charges and merger-related impairments.

In particular, a difficult macroeconomic environment hit WBD’s advertising business, which fell about 11% from a year ago. It’s worth noting that WBD doesn’t benefit as much from the political advertising that mostly pours into local or NFL TV stations.

Advertising revenue in the third quarter was $2 billion, while distribution revenue was $5 billion. The company took $1.5 billion in restructuring costs, as well as $2.2 billion in amortization costs.

At the company’s studios, revenue was $3.1 billion, down 5% from a year ago due to lower theatrical releases and lower revenues home entertainment. This was partly offset by lower operating expenses.

Merger costs also impacted WBD’s bottom line, with EPS of $0.95 also missing Wall Street estimates. The company warned last month that it expects to see total restructuring costs of up to $4.3 billion, due to content-related impairments, as well as layoffs and restructuring charges.

“A significant amount of change is needed,” Zaslav said on the call. “In fact, we see this as a significant opportunity, one that we’ve taken wholeheartedly. To look inside each of our businesses and really determine what works and what doesn’t.

However, the company has increased its expected merger-related cost synergies.

“We are reimagining and transforming the organization for the future while creating company-wide synergy, increasing our goal to at least $3.5 billion, and making significant progress on our combined DTC product. “, Zaslav said in a statement. “While we still have a lot of work to do and there are still tough decisions to be made, we are totally convinced of the opportunity ahead.”

Zaslav also spoke about the recent hires of DC Studios chiefs James Gunn and Peter Safran, saying that for them leading the division “is a passion project, not just a job”, and that they have “a vision and a powerful plans that will drive a more unified and creative approach.

And when it comes to content, Zaslav explained the company’s plans for linear TV, where he said network heads want to be profitable and not spend a lot of money on shows that are beaten by reruns. of The Big Bang Theoryand the decision to remove and cancel content from the company’s streaming platforms and networks.

“We didn’t remove a show from a platform that would help us in any way,” he said, adding that they wanted to “replace those shows with content that has a chance of ‘be more successful and have a larger audience’.

And he pointed to the desire to lean into franchises, citing DC Comics, The Lord of the Rings movies, and the Harry Potter franchises as potential growth poles.