The race for steaming profitability is heating up. With all platforms (but long-established Netflix and Hulu) racing to get their balance sheets into the black, mostly with dismal results, Warner Bros Discovery has now announced they expect to see profitability within the 2023 period. Entertainment lawyer from Blake & Wang P.A, Brandon Blake, shares the news.
Dismal Q1 Results
The news no doubt came as a pleasant surprise to Warner Bros Discovery stockholders. It was certainly the only good news from their Q1 results, too, with the company losing another $1.1B on the non-adjusted net. However, the domestic streaming portfolio for the company did produce a $50M profit before adjustments. While $1.1B is nothing to sneeze at, it is a substantial reduction on 2022’s Q4 loss of $2.1B, itself a downward trend on earlier results.
This means they could be the third streaming service currently on the market to hit the black, with Disney+ still predicting profit for their 2024 year, and Peacock and Paramount+ both wavering badly and unlikely to realistically reach the target before 2025, if ever.
New Subscriber Growth
The HBO Max and Discovery+ streaming services added a combined 1.6M subscribers in Q1, too, bringing them to 97.6M combined subscribers, an improvement on 2022’s Q4, which onboarded 1.1M new subs. While it may not yet be fully profitable, this does represent significant strides forward for the company, especially as it is only just exiting its first full year post-merger and has undergone a significant amount of business restructuring over that period.
Will we really see that coveted profitability this year? CEO David Zaslav seems to believe so. Despite this quarter’s negative free cash flow (to the tune of $930M), much of this can be chalked up to the need to make cyclic payments for sporting rights and we should see an improvement later this year. As for the rest? We can only wait and see.
Film and Television 