Warner Bros. Discovery Shares Plunge Amid Declining TV Ad Revenue and Streaming Subscribers
Warner Bros. Discovery faces a significant drop in stock value as TV advertising sales and streaming subscriber numbers fall, impacting the media conglomerate's financial performance.
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Essential Insights
- Warner Bros. Discovery's stock plunged sharply following reports of decreased TV ad revenue and a decline in streaming subscribers.
- The drop in TV advertising sales was attributed to reduced viewership and a challenging advertising market.
- Combined subscribers for HBO, Max, and Discovery+ fell by 700,000 compared to the previous quarter.
Warner Bros. Discovery (WBD) experienced the steepest decline in the S&P 500 during early trading on Wednesday, with shares falling over 15% after the company revealed a downturn in advertising sales across its TV networks and a loss in direct-to-consumer streaming subscribers.
The media powerhouse, which owns CNN, HGTV, Max, Discovery+, and Warner Bros. studio, reported a third quarter fiscal 2023 loss of $0.17 per share—nearly three times worse than anticipated. Revenue increased slightly by 1.6% year-over-year to $9.98 billion but still missed analyst forecasts.
Advertising revenue within the Networks division dropped 12% to $1.71 billion, primarily due to declining audiences in domestic general entertainment and news channels, coupled with a sluggish advertising environment in the U.S. and select international markets.
The total subscriber count for HBO, Max, and Discovery+ reached 95.1 million, marking a decrease of 700,000 from the preceding quarter. However, ad sales saw a 30% increase, driven largely by growth in Max's U.S. ad-supported tier and heightened engagement per subscriber.
Studio revenue climbed 4% to $3.23 billion, buoyed by the blockbuster success of the "Barbie" film, though progress was tempered by ongoing strikes among Hollywood writers and actors.
Despite the downturn on Wednesday, Warner Bros. Discovery’s shares have maintained a modest gain throughout 2023.
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