Warner Bros. Discovery Drops 1.8 Million Streaming Subscribers in Q2 2023 Due to Max Merger
Has Warner Bros. Discovery been able to take its streaming segment to the Max? All eyes were on that very question this week, as the company released its second-quarter earnings report on Thursday, Aug. 3. As part of the report, WBD revealed that it now has 95.8 million global streaming customers spread between Max and discovery+. That’s a decrease of 1.8 million over the 97.6 million streaming users the company reported having at the end of the first quarter.
In the United States and Canada, WBD dropped 1.3M users and internationally it shed 500,000 customers. While the declines were to be expected thanks to the launch of Max — the new service that combines the library of HBO Max with a large portion of the content previously only available on discovery+ — the company was able to increase the revenue on the customers that it had. Domestically, the average revenue per user (ARPU) increased from $10.82 per month in Q1 to $11.09. Globally, those totaled jumped from $7.48 to $7.71.
The media conglomerate reported a 5% year-over-year revenue increase to bring in $10.4 billion last quarter, including getting company-wide losses down to $1.2B, a significant improvement from the $3.42B loss WBD had in Q2 2022. While the company is still paying off debt and fees associated with the merger of WarnerMedia and Discovery, the financial improvement appears to be proof that CEO David Zaslav’s sometimes Draconian measures were having the desired outcome.
The numbers are a good sign for WBD in its first quarter with Max on the market, but it’s still behind some streaming giants in terms of users. Netflix recently reported having 238.39M global customers, and although Disney has not released its earnings report for its most recent fiscal quarter yet, its last statement showed it had well over 220M customers around the world, despite two quarters of subscriber loss in a row.
Max is still well ahead of Peacock, however, as that streamer reported last week that it had grown to 24M users in Q2. Paramount+ has not reported its numbers for the second quarter yet, but it’s highly unlikely it’s grown so much from its last-stated number of 60M that it’s surpassed Max. Neither Prime Video nor Apple TV+ reveal their subscriber data publicly.
The biggest story of the quarter for WBD was the official launch of its new streaming platform Max, which became available to users on May 23 and combines much of the content from discovery+ with the library of HBO Max. The rollout was not error-free, but company executives have signaled they're pleased with the product so far.
One of the biggest issues WBD saw during the Max rollout was the bundling of movie writers, producers, and directors into a single generic “creator” label that appeared next to titles on the platform. WBD has started fixing that mistake, though it ruffled more than a few feathers in the process.
The company is still configuring Max, which helps explain why so few customers have engaged with discovery+ content on the platform so far. In its first two weeks, only 20% of viewing on Max was spent with discovery+ programming, and only a small fraction of the TV episodes available on discovery+ are also on Max. To help users find discovery+ content more easily, WBD is creating new content hubs that take users to specific titles quickly, as it most recently did with content from the Oprah Winfrey Network.
Indeed, discovery+ is one of the fastest-growing subscription video services available, showing that Max customers have not embraced its content with open arms just yet. WBD is trying new tactics to bring more attention to Max, including licensing HBO original content to Netflix, which the company started doing at the end of June.
The decision to license HBO originals has been beneficial for both Netflix and WBD, as the first title to premiere on Netflix (Issa Rae’s comedy “Insecure”) has seen a 370% jump in interactions since debuting there. Other HBO shows like “Band of Brothers” and “Six Feet Under” could be making their way to Netflix soon as well.
News and sports have yet to be announced for Max in the United States, but there has been some movement on those fronts. WBD announced in June that a livestream of CNN programming would be available on Max in markets outside the U.S. this fall, with plans for a domestic launch to follow. Max is also reportedly going to be offered in a bundle with NFL Sunday Ticket by Google this fall, though virtually no details on that arrangement are available as of yet.
Max
Max is a subscription video streaming service that gives access to the full HBO library, along with exclusive Max Originals. There are hubs for content from TLC, HGTV, Food Network, Discovery, TCM, Cartoon Network, Travel Channel, ID, and more. Watch hit series like “The Last of Us,” “House of the Dragon,” “Succession,” “Curb Your Enthusiasm,” and more. Thanks to the B/R Sports add-on, users can watch NBA, MLB, NHL, March Madness, and NASCAR events.