Linear TV, still responsible for more than half of the business Warner Bros. Discoveryrecords falls greater than all concern. In the second quarter of 2024 revenues from this segment decreased 8% year-over-year to $5.27 billion.
Distribution revenues fell 9% to $2.67 billion. The decline in the number of viewers paying for TV packages with the company’s channels in the U.S. and Canada and the effect of the sale of AT&T SportsNet regional channels (revenue growth was reported to have declined by 3 percentage points) were not offset by an average 5% increase in fees under operator contracts.
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TV ad sales brought in $2.21 billion last quarter, up 10% from less than a year ago. Warner Bros. viewership. Discovery in the U.S. and Canada declined 13% year-over-year. However, revenue from content sales increased by 5% to US$299 million.
The company managed to reduce its revenue generation costs by 11%, to $2.53 billion, including thanks to reduced content spending (sports content costs in the US were transferred to the streaming division). However, with sales, general and administrative costs the same as last year ($743 million). Adjusted EBITDA decreased from $2.17 to $2 billion.
“Dune” helped, but TV and games were worse
Vertically, Warner Bros. Discovery Coverage Quarterly revenues for film and TV studios and game producers fell 5% year-on-year to $2.45 billion, of which from content sales – by 7% to $2.24 billion.
Although cinema revenues increased by 19 percent, mainly thanks to the successful premieres of the second part of “Dune” and “Godzilla and Kong: A New Empire”, but TV broadcasters’ revenues fell 27%. (the premiere calendar in this area was organized differently than last year), a of video games – by 41 percent (The “Suicide Squad: Death to the Justice League” game sold significantly less than last year’s “Hogwarts Legacy.” However, revenue classified as other increased from $176 million to $209 million, largely due to the opening of a Harry Potter-themed theme park in Tokyo last summer.
The segment generated $210 million in adjusted EBITDA, compared to $306 million a year earlier.
Streaming with the biggest loss, has more than 100 million customers
Also a streaming division Warner Bros. Discovery revenue fell 6% to $2.57 billion. This was due to a reduction in content revenues from $410 million to $123 million (the company had much less to sell than it did a year ago).
While Distribution revenues increased slightly to $2.2 billion thanks to the introduction of the Max platform in South America in the first quarter of this year and to Europe in the second quarter. (has been operating in Poland since mid-June), and despite a further decline in sales of linear TV packages in the US and Canada.
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After shifting sports spending to the streaming segment, quarterly revenue-generating costs rose 3 percent to $2.03 billion, and selling, general and administrative expenses fell 17 percent to $647 million. (A year ago, the company spent more on marketing due to the Max’s U.S. debut.)
Max’s expansion into other countries has resulted in: increase in the number of subscribers to the company’s platforms outside the US and Canada from 42.6 million in the middle of last year to 46.9 million at the end of March this year and 50.8 million at the end of June. Average revenue per customer in the last quarter, year-over-year, was $3.85.
However, in The U.S. and Canada (the company classifies them as domestic markets) saw subscriber numbers decline year over year, from 54 million to 52.5 million, but average revenue for each increased from $11.09 to $12.08. This increase is also due to advertising revenues, which in the streaming division increased from US$ 121 to US$ 240 million.
Total number of streaming customers surpassed 100 milliongrowing in the last quarter from 99.6 to 103.3 million. However, the segment’s profitability deteriorated significantly – the adjusted EBITDA loss increased from 3 dollars to 103 million dollars.
Television at Warner Bros. Discovery is worth much less
Warner Bros.’ total profit. Discovery’s adjusted EBITDA decreased from $2.15 to $1.79 billion. Other indicators of the concern’s profitability resulted in 9.39 billion dollars in amortization and impairment charges (a year earlier they amounted to only 6 million dollars). 9.1 billion PLN of this amount represents a reduction in the valuation of the television segment.
Consequently the company’s quarterly loss deepened year over year, from $906 million to $10.21 billion, and the net loss – from $1.22 to $10.03 billion. Over the first half of the year, the company’s revenues decreased by 6.6% to US$ 19.67 billion,
Max’s priority will be the next “bold steps”
In the report, David Zaslav, head of Warner Bros. Discovery, emphasized that the company’s main priority is its global streaming segment, That’s why they’re “extremely pleased” with the growth in the last quarter.
The goal is achieve sustainable profitability for this division in the second half of next year. To do this, Max will need to acquire new customers more quickly, incurring fractions of the costs.
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And the rest of the company’s activities? – With industry headwinds, we have taken and will continue to take bold steps, such as reimagining our existing linear TV partnerships and seeking new aggregation opportunities – Zaslav.
Warner Bros. Disovers Share Price Dropped Significantly
Warner Bros. Earnings Disposals were negatively assessed by stock market investors. Following the publication of the latest quarterly report the company’s shares fell approximately 8.5% in after-hours trading.
At the close of trading on Thursday, the price was $7.71. Since the beginning of January this year, it has decreased by 32 percent and in the last 12 months by 47 percent.
