Warner Bros. Discovery Misses Earnings Estimates as Linear TV Business Declines, but Streaming Segment Shows Promise

The article discusses Warner Bros. Discovery’s (WBD) first quarter earnings, which missed estimates on both revenue and earnings per share. The company’s linear TV business declined due to a weak advertising market and strike-related delays at its studio segment. Network advertising revenue decreased by 11% in the quarter, and the company’s studios business struggled, particularly due to underperformance from the game “Suicide Squad: Kill the Justice League.” However, the direct-to-consumer (DTC) streaming business added 2 million Max subscribers in the quarter and generated $175 million in streaming advertising revenue. The DTC segment also turned a profit for the full-year 2023 and is expected to remain profitable in 2024. WBD’s CEO, David Zaslav, stated that the company is in continuing conversations with the NBA regarding media rights, and while the company has the ability to match third-party offers, it’s unclear where current talks stand. Additionally, WBD may pursue more cost cuts and stream pricing increases, according to a report by Bloomberg.