WBD adds 5 million streaming customers, but revenue falls in Q1
WBD adds 5 million streaming customers, but revenue falls in Q1
Declines in home entertainment, box office, and linear revenues led to a 10% overall drop for WBD in the first quarter.
There is perhaps no better company to illustrate the changing nature of the media business currently than Warner Bros. Discovery. WBD is trying to execute a pivot to streaming in a time where linear TV is failing, box office revenues aren’t nearly what they once were, and younger audiences are spending less time watching TV and more time online. Those struggles were reflected in WBD’s first quarter earnings, which had some silver linings but also clearly weren’t what the company was hoping to see.
Key Details:
- New subscribers: WBD added more than 5 million streaming subscribers to Max and other services.
- Revenue slump: Revenue dipped by 10% for the company as a whole in Q1.
- Not so looney: Max dropped a huge selection of “Looney Tunes” titles in recent months, perhaps signaling a content strategy shift.
We’ll start with the good news for WBD in the quarter. The company managed to add 5.3 million subscribers, rising to 122.3 million globally after finishing the fourth quarter of 2024 with 116.9 million subs. It’s fair to assume that most of these subscribers signed up for Max, but WBD does not break out its streaming services individually when reporting subscriber numbers in its earnings statements.
Revenue-wise, however, things were a bit less rosy for WBD during the quarter. Total revenue was down 10% year-over-year to $9 billion, which was lower than Wall Street expectations. Adjusted EBITDA was $2.1 billion, flat compared to the first quarter of 2024.
Driving the revenue declines were shortfalls in content and linear incomes. Content revenue fell 27% year-over-year, thanks to lower box offices and the strong performances of “Dune: Part Two” and “Godzilla x Kong: The New Empire” in the first quarter of 2024. WBD also did not release any new games during the quarter, and home entertainment revenue dipped as well.
Advertising revenue was down 8% as well, as the number of new customers added to ad-supported streaming tiers was more than offset by declines in domestic viewership for WBD’s TV networks. There was also a 2% decline in distribution revenue, as pay-TV subscribers around the world continue to cut the cord.
“In the past, we have effectively managed our business through periods of uncertainty, economic turbulence, and even recession, such as the COVID pandemic,” WBD’s shareholder letter said. “As in those cases, we have again acted swiftly, though prudently, to control costs and are preparing for all ranges of scenarios over the months to come, while continuing to invest for future growth.”
WBD was fairly quiet on the news front in the first quarter of 2025, but it did manage to make a kerfuffle with another high-profile content removal from Max. The streamer pulled a wide range of classic “Looney Tunes” cartoons from its library in March, and could remove other animated titles and kids shows in the future as well.
HBO Max
HBO Max is a subscription video streaming service that gives access to the full HBO library and 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. Within HBO Max, B/R Sports allows users to watch live NBA, MLB, NHL, March Madness, and NASCAR events.