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Warner Bros. Discovery lost nearly two million subscribers across its streaming apps in the second quarter of 2023. The drop came amid a massive rebranding and restructuring of its products that saw HBO Max turn to Max in May, encompassing Discovery Plus within it. The latter service is also available standalone, though.
In its Q3 2023 earnings report on Thursday, Warner Bros. Discovery stated that it had 95.8 million subscribers across all of its streaming services globally. The figure is down by 1.8 million from the 97.6 million subscribers it had at the end of Q1. However, the company doesn’t seem to be worried. Its chief financial officer, Gunnar Wiedenfels, attributed the drop to “overlapping subscriber bases between Max and Discovery Plus.”
The Warner Bros. Discovery executive further added that it was an “expected churn” following the end of The Last of Us season 1 and the series finale of Succession. CEO David Zaslav echoed his comments, saying that the subscriber disruption was expected after the Max rebranding. The process involved asking existing HBO Max subscribers to download a new Max app to their devices, which many likely decided not to do.
Zaslav hinted that the company was expecting an even bigger churn, so a loss of 1.8 million subscribers isn’t too bad news. More importantly, the drop didn’t hurt streaming revenue. Warner Bros. Discovery generated a revenue of $2.73 billion from the streaming business between April and June of 2023. That’s notably more than the $2.5 billion it generated in the first three months of the year.
The Max rebranding hasn’t helped the company become profitable yet
The company’s streaming business still isn’t profitable, though. It reported a three million operating loss this past quarter. But on the bright side, Zaslav said that the firm is expecting to become profitable at least in the US this year. Warner Bros. Discovery is also looking to launch Max internationally over the next year and beyond. The platform is touted to boast “full capability to deliver live programming,” with the company planning to share more soon.
“We’re early on, but news and sports are important differentiators – they’re compelling, and they make these platforms come alive,” Zaslav said during an earnings call (via The Verge). He has talked about the importance of incorporating news and sports into Max in the past as well. Rumors have it that the platform could add live CNN broadcasts and more live programming down the line.
This is part of a broad strategy that involves exiting the regional sports network business. Warner Bros. Discovery is looking to “sell or cease operations of the company’s networks by the end of this year.” Its AT&T SportsNet channels currently air local baseball, basketball, and hockey games in the US.
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