WBD posts $103m streaming profit in 2023, studio & network revenues declines

David Zaslav (Source: Warner Bros. Discovery)

Warner Bros. Discovery (WBD) has posted a turnaround in its streaming fortunes with a $103m DTC profit for 2023, though the business posted an overall decline in revenues.

If sustained, the streaming gains would mark a significant climb back from the near $2.1bn loss of 2022, with CEO David Zaslav arguing that the company is “now on solid footing with a clear pathway to growth.”

Across all its brands, which include Max and Discovery+, WBD reported 97.7 million DTC subscribers as of the end of Q4 2023.

While this is an increase of 1.8 million on the previous quarter, the rise was largely due to the acquisition of Turkish streamer BluTV in December, which included 1.3 million existing subscribers. Discounting that and TNT Sports Chile, the rise amounted to around 500,000 new subs.

Full-year totals

Overall, WBD’s full-year total revenues decreased 4% to $41.3bn compared to the prior year, on a combined basis.

Studios revenues fell 12% to $12.2bn, which WBD said was primarily driven by lower TV revenues, which “more than offset” higher games revenue from the release of the video game Hogwarts Legacy and higher theatrical revenue from the release of Barbie.

TV revenues, it said, were “adversely impacted” by the WGA and SAG-AFTRA strikes and certain large licensing deals in the prior year.

Networks revenues decreased 8% to $21.2bn as a result of declining advertising and distribution revenues.

Advertising revenue decreased primarily due to audience declines in US-based general entertainment and news networks, with a soft advertising market in the States and “in certain international markets” impacting the results, said WBD.

DTC revenues were up, however, by 5% to $10.2bn, driven by “growth across all revenue streams”.

Advertising revenue grew due to higher engagement with streaming service Max in the US, while distribution revenue grew due to new partnership launches and price increases in both the US and most of WBD’s international markets.

Zaslav said the company had paid down $5.4bn in debt in 2023 and has “an attack plan” for 2024 that includes the roll-out of Max in selected international markets and “a more robust creative pipeline” across film and TV studios.