Warner Bros. Discovery experienced a mix of successes and challenges in the first quarter, with significant growth in streaming subscribers and profits, despite a decline in film studio revenue, which has since rebounded in the second quarter.
Global linear advertising sales saw a 11% drop, primarily due to ongoing domestic audience declines. However, this was partially offset by positive trends in sports and international markets. Streaming ad revenue, on the other hand, surged by 35%, driven by an increase in ad-lite subscribers.
By the end of March, the company boasted 122.3 million global streaming subscribers, marking a 5.3 million increase from the previous quarter. This growth is attributed to the rollout into new markets, including recent launches in Australia and Turkey. The company plans to expand into more than a dozen additional markets by the end of the year, aiming for a presence in over 85 countries. Future launches are planned for the U.K., Ireland, Italy, and Germany in early 2026.
The streaming division reported a $339 million profit, led by popular shows such as "The White Lotus," "The Pitt," and "The Last of Us." CEO David Zaslav highlighted the success of "The White Lotus," noting its cultural impact and strong viewership, averaging over 25 million global viewers per episode, a 40% increase from the previous season. "The Pitt" also performed well, averaging over 12 million viewers per episode, leading to the development of more elevated procedural dramas.
The highly anticipated "Harry Potter" series is set to begin production, with a debut scheduled for early 2027. Content revenues were down due to a weaker theatrical performance, but the studio's profit increased thanks to lower costs, including in the gaming sector, which had no new releases during the quarter.
The film business has since seen a turnaround with the release of "Minecraft" and "Sinners," and the upcoming "Superman" film, which will be supported by a full marketing campaign starting soon.
WBTV launched two successful new shows, secured four new third-party series orders, and renewed nine series. Additionally, three new animation titles were greenlit, with four new scripted series set to launch later this year.
Total revenues fell 10% to approximately $9 billion, with a net loss of around $500 million, including $1.6 billion in pre-tax acquisition-related amortization, content fair value step-up, and restructuring expenses.
Across the company's three divisions, streaming operating income increased to $339 million from $86 million, with revenue up 9% to $2.6 billion. Studio profit rose 63% to $259 million, although revenue decreased by 16% to $2.3 billion. Global linear networks saw a 14% drop in operating profit to $1.8 billion, with revenue down 6% to $4.8 billion.
The company is reinvesting some of the savings from its NBA package into additional domestic sports rights, with the French Open and NASCAR debuting on TNT Sports in the second quarter, leading to incremental sports rights and production costs.
Warner Bros. Discovery has started reporting financial data for two operating divisions: Global Linear Networks and Streaming & Studios, aimed at improving strategic flexibility and pursuing potential opportunities.
CEO David Zaslav acknowledged the sensitivity of the advertising business to macroeconomic conditions, emphasizing the company's ability to manage through periods of economic uncertainty. WBD shares are currently down about 2% in early trading. Zaslav and other executives are hosting a call at 8:30 ET.
What are the Harry Potter Movies about and Where to Watch
The Harry Potter movies chronicle the magical adventures of young wizard Harry Potter as he attends Hogwarts School of Witchcraft and Wizardry, confronts the evil Lord Voldemort, and discovers his extraordinary destiny in the wizarding world. If you're wondering where to watch harry potter films, they are available across multiple streaming services including HBO Max, Amazon Prime, or through digital rental platforms, though availability varies by region and may require using alternative access methods to overcome geographical restrictions.
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