The company’s ad revenue and studio unit profits fell, but it has a plan of attack for 2024, which includes launching Max in key international markets.
Warner Bros. Discovery has become the first Hollywood conglomerate to post a full-year profit for its streaming unit. In 2023, the company posted a $103 million profit, compared with a loss of nearly $2.1 billion in 2022 for its “Direct-to-Consumer” or DTC unit.
The company narrowed its fourth-quarter loss by a significant margin, as cost reductions and reduced content production caused by last year’s Hollywood work stoppages helped minimize a 14% drop in advertising sales and other demanding conditions for traditional media companies.
However, cable channels TNT and TBS, studio Warner Bros., and streaming service Max reported a loss of $400 million in their fourth quarter, or 16 cents per share, compared with a loss of $2.1 billion in the same period a year earlier: the loss, 86 cents per share.
In an official statement, David Zaslav, chief executive officer of Warner Bros. Discovery, indicated that they have a plan of attack for 2024 that includes the launch of Max in key international markets. “A stronger creative pipeline across our film and television studios and further progress toward our long-term financial goals, and we are confident in our ability to achieve this. Drive sustained operating momentum and increased shareholder value,” said
During the fourth quarter, this segment of WBD, which includes its streaming and premium pay-TV services, posted a loss of $55 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), compared with a year-ago loss of $217 million. Segment revenues grew, helped by increases in subscriber prices and higher advertising revenues, driven by Max US ad-lite subscriber gains.
The company had improved the results of its transmission unit for two of the first three quarters of 2023. In the first quarter, it had posted a profit of $50 million from a loss of $654 million a year earlier. In the second quarter, its streaming loss narrowed to $3 million from a larger loss a year earlier. In the third quarter, its streaming profit was $111 million compared with a loss of $634 million a year earlier.
WBD achieved its year-end target for debt reduction. Its net leverage ratio, defined as total debt divided by the sum of the most recent four quarters of adjusted EBITDA, was 3.9 times at the end of 2023. WBD had targeted ending the year at four times or less.
However, the company also struggled with a weaker advertising market in the quarter, as did its peers, with advertising revenue in its network segment falling 12 percent, or 14 percent, excluding exchange rate impacts.
