Warner Bros. Discovery reported its second quarter of 2022 results and revealed that HBO Max, HBO and Discovery+ have a combined total of 92.1 million subscribers, up about 1.7 million from 90.4 million the prior quarter. However, the group’s streaming businesses lost subscribers in the United States during the period, dropping 300.000.
Prior to the earnings report, there was a lot of speculation regarding a possible huge restructuring of the group’s marquee streaming platforms, HBO Max and Discovery+. Supposedly, the company intended to gut HBO Max and combine it with Discovery+, which would lead to a wave of layoffs.
The company avoided commenting on those rumors, but it did confirm that Discovery+ and HBO Max would eventually be combined into a single service, which will begin to roll out in the United States in summer 2023, with the Latin American market to follow in Fall 2023. In early 2024, Warner Bros. Discovery plans to roll out the new service in Europe, following by the Asia-Pacific model in mid-2024, and additional new markets in Fall 2024.
Financially speaking, the company reported revenues of US$9.8 billion and a loss of $3.4 billion, missing Wall Street estimates. Most of the analysts had been expecting earnings of US$11.91 billion and an EPS of $0.08. The company was also expected to add more than 1.6 million combined streaming subscribers.
“We have had a busy, productive four months since launching Warner Bros. Discovery, and have more conviction than ever in the massive opportunity ahead. We have the most powerful creative engine and bouquet of owned content in the world, as highlighted by our industry leading 193 Emmy nominations, and we intend to maximize the value of that content through a broad distribution model that includes theatrical, streaming, linear cable, free-to-air, gaming, consumer products and experiences, and more, everywhere in the world,” said David Zaslav, President & CEO of Warner Bros. Discovery.
“We are confident we are on the right path to meet our strategic goals and really excel, both creatively and financially, and could not be more excited about the future of our company,” Zaslav added.
● CORPORATE DEMAND SHARE
While Warner Bros. Discovery reported its earnings, Parrot Analytics analyzed the company’s corporate demand share in the United States and also the US Originals demand growth for HBO Max, the company’s flagship streaming platform, against all other services.
According to Parrot Analytics, due to the combination of Discovery and WarnerMedia’s assets, just three conglomerates — The Walt Disney Company (19.7%), Warner Bros. Discovery (17.8%) and Paramount Global (12.5%) — now control half of the US audience demand for TV content.
In terms of content, the audience for WBD’s crown jewel asset HBO Max continues to grow rapidly. The total US demand for HBO Max’s original series is up 102% since the first quarter of 2021, more than double the growth rate of its combined competition. This is a strong leading indicator for further subscriber growth, which should accelerate in Q3 and Q4 with “House of the Dragon” debuting later this month.
We are confident we are on the right path to meet our strategic goals and really excel, both creatively and financially” David Zaslav President & CEO of Warner Bros. Discovery