WBD Boss: Max to Add 6M Customers in Q3, Company Back on Solid Financial Footing
Warner Bros. Discovery CEO David Zaslav made the big reveal on Max’s subscriber jump at the Goldman Sachs Communacopia and Technology Conference on Thursday.
Is Warner Bros. Discovery ready to claw its way back to being one of the dominant media companies in Hollywood — at least from a financial perspective? Company CEO David Zaslav sure seems to think so. The executive spoke to analysts and investors at the Goldman Sachs Communicopia + Technology conference on Thursday, revealing that the company’s flagship streaming service Max is expected to end the third quarter of 2024 with 6 million more subscribers than it had at the end of the second quarter.
Key Details:
- Adding 6 million customers will bring Max’s total close to 110 million.
- Zaslav praised the Disney+, Hulu, and Max bundle, as well as his company’s new carriage deal with Charter.
- WBD has paid down $16 billion in debt since WarnerMedia and Discovery merged in 2022.
Warner Bros. Discovery wrapped up the first half of the year with 103.3 million global streaming customers. The company doesn’t break out how many subscribers its individual streaming services have, but it’s safe to assume that the vast majority of those customers are on Max. Adding another six million subscribers in the quarter that will end in September will bring the company’s streaming total to nearly 110 million global customers.
What’s the reason for Max’s new influx of subscribers? Distributing the streamer in more countries is one, and the new bundle of Disney+, Hulu, and Max that launched in late July is definitely another. Zaslav had a lot of nice things to say about the bundle, pointing out that the sharing of advertising costs between the two companies and the lack of a cable distributor to split profits with is a boon to both WBD and Disney.
“The [average revenue per user] for us is compelling because for Disney and us, there’s no third party, we get all the money,” Zaslav said. “It’s doing really well. It’s early. It’s been seven, eight weeks. So we have to see what happens. But I bet the churn’s lower. I know the marketing is a lot lower because we’re doing it together, better together.”
Zaslav also had the chance to discuss his company’s new carriage deal with Charter Communications, which was announced on Thursday. That deal allows Spectrum TV Select customers to get free access to Max and discovery+ as part of their cable subscription, which Zaslav touted along with the popularity of WBD’s cable channels among Spectrum and other cable viewers.
“On any given day, between 30% and over 50% of viewing on basic cable in America is us, CNN, Food, TNT, TBS, TLC, Discovery,” he said proudly. “We are the beating heart of basic cable in America. And we’re the beating heart of basic cable in most countries in the world.”
Could WBD Be on the Prowl for M&A Opportunities?
Zaslav also told the Goldman Sachs conference that the company had “fixed” its balance sheet, paying down $16 billion of debt since the merger of WarnerMedia and Discovery in 2022. That leaves it in a good financial position, as most of its remaining debt is long-term and low-interest, and the CEO hinted that his company may be keeping an eye out for merger and acquisition opportunities thanks to the improvements in WBD’s bottom line.
“It puts us in a position where we could be patient and strategic now,” Zaslav said of the company’s balance sheet. “And we have the ability to make moves if we want to.”
The goal of ending 2025 at $1 billion in the black with its direct-to-consumer segment is still at the forefront of Zaslav’s mind, and he also explained that he wants to continue revitalizing the company’s movie studio to generate at least $3 billion annually. He acknowledged that the cable business industry-wide is on the decline, but pointed to numerous new sports deals made by the company as proof that they can still generate strong revenue in the near future.
Zaslav was not asked directly about his company’s prospects of losing the NBA, which at the moment seems to be the most likely outcome. WBD is suing the league over a matching rights clause it says was improperly rejected when the NBA made its new national broadcast deals with ESPN, NBC, and Prime Video, potentially leaving TNT without live NBA games for the first time in decades. Zaslav did say he hoped WBD would continue to have the NBA in the future, “depending on how [the lawsuit] turns out.”
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.