Warner Bros. Discovery continues to lose money despite success of ‘The Last of Us’ and ‘Hogwarts Legacy’

by Ana Lopez

Warner Bros. Discovery (WBD) reported disappointing Q4 results yesterday, which revealed a net loss of another $2.1 billion, including $217 million from the streaming division. This is despite the company touting the success of its new original series “The Last of Us,” which averaged more than 15 million viewers, and its recently launched Hogwarts Legacy video game, which grossed more than $850 million in just two weeks. saw retail sales.

The company narrowly missed analyst estimates of nearly $11.36 billion in revenue, accounting for $11 billion — a significant increase from $9.82 billion in Q3 2022. Also, the streaming segment increased 6% in revenue to $ 2.45 billion, beating Wall Street’s $2.39 forecasts. billion.

In addition, the company failed to beat its subscriber estimates, with only 1.1 million subscribers for HBO, HBO Max and Discovery+, versus a predicted 1.6 million net additions, bringing the new total to 96.1. million is coming. WBD also missed last quarter’s expectations, gaining only 2.8 million subscribers instead of the expected net addition of 3.27 million. WBD is still behind streaming giant Netflix, with 230 million subscribers worldwide.

The new addition of HBO Max subscribers was primarily due to the streaming service’s return to Amazon Prime Video Channels, as well as the debuts of hit shows like “The Last of Us” and the second season of “The White Lotus,” which aired 10 won Emmys and two Golden Globes. The company recently announced that “The Last of Us” would be getting a second season.

However, HBO Max and Discovery+ have yet to become profitable for WBD, putting it in the same boat as other media companies. Netflix, on the other hand, has made a profit.

On the upside, WBD CEO David Zaslav told investors that the merger-related restructuring is finally complete. Over the past 10 months, the company has implemented layoffs along with many movie and TV cancellations to reduce its mountain of debt.

“We have taken bold, decisive action over the past 10 months and most of our restructuring is behind us. We have full control over our company and we are now one company. We have a fantastic leadership team moving us forward, everyone rowing in the same direction. And together we are focused on making our companies better and stronger,” said Zaslav during the earnings call. “Last year was a year of restructuring. 2023 will be a year of construction.”

Speaking of the merger, Zaslav announced that the new HBO Max/Discovery+ streaming service would launch in the coming months. The company will reveal more details at a special press event on April 12.

He also confirmed that Discovery+ will remain a standalone service for customers willing to continue paying the lower price of $4.99 per month. Meanwhile, HBO Max continues to be combined with Discovery+ content. Last month, WBD raised the price of HBO Max’s ad-free subscription for the first time, raising the cost from $14.99 to $15.99 per month.

Now that WBD has completed its restructuring, it can focus on expanding its original content catalog. For example, Zaslav revealed some exciting news for “Lord of the Rings” fans, announcing that Warner Bros Studios had signed a deal to make multiple movies based on the franchise.

The company will also “take full advantage” of its other IP, including “Superman,” “Batman” and “Harry Potter,” Zaslav said.

Most recently, DC Studios co-chairs James Gunn and Peter Safran shared the 10 upcoming movie and TV projects, such as ‘Superman: Legacy’, ‘The Batman – Part II’, ‘Supergirl: Woman of Tomorrow’ and more.

“I believe we have an overwhelming advantage in the market with the IP we own,” Zaslav added. “We have the strongest hand in the industry, with the most complete portfolio of assets and globally recognized franchises, personalities and storytelling IP in sports, news, non-fiction and entertainment, in virtually every region of the world and in every language.”

Titles coming out this year include “Shazam! Fury of the Gods,” which will hit theaters March 17; “The Flash,” which debuts this summer on June 16; and “Aquaman and the Lost Kingdom,” starring Jason Momoa, which premieres December 25. Other films include the ‘Barbie’ movie starring Margot Robbie and Ryan Gosling, ‘Dune: Part Two’ and Timothée Chalamet in ‘Wonka’.

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