The CEO of Warner Bros. Discovery gave an update Friday on its U.S. streaming profitability timeline.
In both the company’s first-quarter earnings release and a call with analysts, David Zaslav revealed the U.S. direct-to-consumer business’s profitability is projected to come “a year ahead of our guidance.” Now, the company anticipates it happening for 2023, he said.
He said during the call Warner Bros. Discovery has “strong command and control” of its overall streaming business, adding that the company “feel[s] really good about the trajectory we are on.”
Warner Bros. Discovery’s overall direct-to-consumer segment generated total revenues of $2.46 billion in the first quarter with $2.41 billion in operating expenses.
For adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), the entire streaming segment spanning HBO, HBO Max and Discovery+ made $50 million. In the same quarter last year, the company posted a $654 million adjusted EBITDA loss on a “pro forma combined basis.”
Warner Bros. Discovery had 97.6 million subscribers for the first quarter, including 55.3 million domestically and 42.3 million internationally. That marked a gain of 1.6 million subscribers quarter over quarter and 7 million year over year.
Zaslav told analysts and investors the company has “turned the corner on our streaming business.”
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“We’ve focused on it very hard, and we built what we think will be a very strong independent business, and it starts with profitability,” he said. “And so we made $50 million this quarter. Our U.S. streaming business will be profitable for the year, and we have real scale.”
The U.S. direct-to-consumer business as “no longer a bleeder,” he added.
Warner Bros. Discovery said its first-quarter revenue fell year over year to $10.7 billion.
It saw a $1.07 billion net loss, a figure that the company also said “included $1,810 million of pre-tax amortization from acquisition-related intangible assets and $95 million of pre-tax restructuring expenses,” according to the release.
Warner Bros. Discovery executives also talked Friday about its upcoming streaming platform that will bring together HBO Max and Discovery+ content. The platform will be called Max.
WARNER BROS DISCOVERY REVEALS MAX STREAMING PLATFORM DETAILS, SETS DEBUT DATE
Max’s U.S. debut is slated for May 23, something Zaslav said he was “excited” about. After that will come a rollout in Latin America “later this year and markets in EMEA and APAC in 2024,” according to the CEO.
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