First earnings report from Warner Bros. Discovery as a merged company – The Hollywood Reporter

For the first time since the merger of WarnerMedia and Discovery Inc. earlier this year, the Discovery of Warner Bros. full quarterly report earningsoutlining his plan to fully integrate the two companies and find billions of dollars in savings along the way.

But of course, it’s streaming that remains a priority for Wall Street, and WBD opted to combine all of its direct-to-consumer subscribers into one issue for the quarter, revealing a total DTC subscriber base of 92.1 million. , including HBO Max and Discovery+.

WarnerMedia previously reported 76.8 million subscribers to HBO or HBO Max last quarter, with Discovery reporting 24 million DTC subscribers, but those reports used an older definition of what a subscriber is. The new numbers do not include “10 million legacy Discovery non-prime subscribers and non-activated AT&T Mobility subscribers of Q1 subscriber count,” according to the company. WBD adds that using its new definition of direct-to-consumer subscribers, the company added 1.7 million subscribers from the first to the second quarter.

WBD executives said they plan to launch a combined streaming service in the coming months.

The company reported revenue of $9.8 billion and a loss of $3.4 billion, excluding Wall Street estimates. The consensus had been for earnings of $11.91 billion and EPS of $0.08. The company also needed to add over 1.6 million combined streaming subscribers.

WBD recorded $2.7 billion in advertising revenue for the quarter, $4.8 billion in distribution revenue and $2 billion in content revenue. The streaming side of the business lost $1.5 billion in the quarter.

In a press release, the CEO of WBD David Zaslav gave a hint about the company’s thoughts on distribution, implying that it wouldn’t put all of its chips on streaming.

“We intend to maximize the value of this content through a broad distribution model that includes cinema, streaming, linear cable, free-to-air, gaming, consumer products and experiences, and more. all over the world,” he said.

On the earnings call, Zaslav touted the “optional nature” of the venture, praising the value of windowing and adding that “we will fully embrace theater because we believe it creates interest and demand.” “.

He also said they were “big believers in the linear business” when it came to television. “We expect this to be a very significant cash generator for us.”

WarnerMedia and Discovery completed their merger in April, creating the entertainment powerhouse, with many former Discovery executives at the bar. CFO Gunnar Weidenfels and Zaslav have promised to find some $3 billion in cost savings, and many analysts expect that figure to be conservative.

The company already dropped the CNN+ streaming service just weeks after launch, and significantly reduce on scripted programming at TBS and TNT, leaning more towards sports and unscripted fare.

This week, the company revealed the shocking decision to cancel two movies which were in development for HBO Max, a Scooby Doo feature, and bat girla $90 million DC Comics film that had already completed principal photography and was in post-production.

The merged company’s earnings report (and ensuing call) ends a frenzy of speculation this week in Burbank and New York as rumors swirled about deep cuts, the original lineup of which could be axed and removal of content from HBO Max. Staffers and observers have also been looking to see how the conglomerate will balance debt, advertising market headwinds and supply chain issues as it seeks to tighten its belt on content spending.

However, Zaslav spoke highly of HBO Max and its management team on Thursday, noting that HBO chief Casey Bloys has signed a new long-term deal and the company plans to give them more money to spend in coming years.

A CNN source said within the company’s offices at Hudson Yards, there was definitely “anxiety” among some staff who work across multiple teams at the company. CNN has already seen layoffs when CNN+ was shut down, but deeper cuts are expected in the weeks and months ahead.

But Zaslav was nothing but optimistic.

“In many ways, we’re just getting started and we’ve only begun to scratch the surface in terms of upside potential,” he said, later adding that the company is, ultimately, in the area of ​​cash generation. “We’re not looking to get all the subs back, we want to get paid.”

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