Warner Bros. Discovery Narrows Q4 Loss Despite 14% Decline in Ad Revenue

Warner Bros. Discovery narrowed its fourth-quarter loss by a significant margin as cost reductions and reduced content production caused by last year’s Hollywood labor stoppages helped it maneuver around a 14% decline in advertising sales and other onerous conditions for traditional media companies.

The owner of the TNT and TBS cable networks, the Warner Bros. studio and the Max streaming service reported a loss of $400 million in its fourth quarter, or 16 cents per share, compared with a loss of $2.1 billion in the year-earlier period, 86 cents per share.

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“We have an attack plan for 2024 that includes the roll-out of Max in key international markets, a more robust creative pipeline across our film and TV studios, and further progress against our long-range financial goals and are confident in our ability to drive sustained operating momentum and enhanced shareholder value,” said David Zaslav, Warner Bros. Discovery’s CEO, in a prepared statement.

Revenue for the fourth quarter of 2023 came to nearly $10.3 billion, a decline from $11 billion in the year-earlier period.

Warner Bros. Discovery is, like many of its rivals, grappling with the exit of many consumers from cable subscriptions, a dynamic that crimps what was once a steady flow of revenue. As more TV viewers migrate to streaming video on demand, traditional media companies have been caught between a rock and a hard place, forced to invest in new broadband venues like Max, while reckoning with the fact that digital revenue may never match what was generated by linear operations.

The company’s studio operations saw revenue fall 18%, largely the result of the Hollywood labor strikes. The effects of the work stoppages on TV production offset increases in revenue from movie releases such as “The Color Purple” and “Aquaman and the Lost Kingdom” and from games such as “Hogwarts Legacy.”

Revenue from TV networks fell 8%, due in part to a 3% decline in distribution revenue and a 14% fall in advertising sales. Warner Bros. Discovery said its exit from some regional sports networks and a soft market for U.S. TV advertising affected performance during the quarter.

Revenue from the company’s direct-to-consumer operations rose 3%, spurred by gains in advertising on Max.

On the earnings call, Zaslav said WBD will launch the Max ad-supported plan in more than 40 markets by end of 2024; currently, that’s available only in the U.S.

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