Streaming surge not enough to offset studio and TV revenue slide
Warner Bros Discovery fell short of Wall Street’s expectations for first-quarter revenue, as a sluggish box office lineup and a continued decline in traditional television viewership weighed heavily on the company’s financial performance.
The entertainment giant, which has been grappling with cord-cutting and evolving viewer habits, reported a 10% drop in overall revenue for the January-to-March period, landing at $8.98 billion—well below analyst estimates of $9.60 billion, according to LSEG data. The company also reported a loss of 18 cents per share, exceeding the anticipated 13-cent loss, despite an 11.8% reduction in overall costs.
Studio revenue took the hardest hit, falling 18% to $2.31 billion. Analysts had expected $2.73 billion, according to Visible Alpha. The decline was primarily attributed to the underperformance of the company’s marquee title for the quarter, “Mickey 17,” a sci-fi dark comedy by director Bong Joon Ho. While the film recouped its reported budget, it failed to replicate the blockbuster success of last year’s “Dune: Part Two,” which grossed over $700 million.
The TV networks division also struggled. Revenue declined 7%, with advertising revenue dropping 12%, a consequence of advertisers shifting away from cable television as viewers increasingly migrate to streaming platforms. The segment includes well-known channels such as CNN, Discovery Channel, and Animal Planet.
Still, there were signs of resilience in Warner Bros Discovery’s streaming business, which saw robust growth. The company added 5.3 million subscribers—well above the 3.1 million projected by analysts—bringing its total streaming user base to 122.3 million. This growth was buoyed by a compelling content lineup, including the third season of HBO’s critically acclaimed “The White Lotus” and new medical drama “The Pitt.”
WBD also expanded its global streaming footprint by launching its Max platform in Australia earlier this year, after previous rollouts in over 70 countries across Europe and Asia. Analysts noted that the company benefited from a reduced churn rate, partially due to a bundled offering with Disney+ and Hulu introduced in late 2024.
Looking ahead, Warner Bros Discovery is hopeful for a stronger second quarter. Ryan Coogler’s horror film “Sinners” and the highly successful “A Minecraft Movie,” which has already grossed $900 million globally, have bolstered the company’s box office performance. Anticipation is also building for the July release of “Superman,” directed by James Gunn, known for his string of Marvel blockbusters.
Despite a 1.9% dip in premarket trading, Warner Bros Discovery remains focused on long-term profitability through its pivot to streaming and a refreshed theatrical slate.
