Warner Bros. Discovery (WBD) unveiled its second-quarter earnings on Thursday, disclosing a significant loss of 1.8 million streaming subscribers across its platforms, including HBO, Discovery+, and the newly combined service Max. This drop brings the total number of users to 95.8 million, down from 97.6 million in Q1.
Analysts and WBD had anticipated some subscriber loss due to the overlap between Max and Discovery+, leading to customers eliminating redundant subscriptions. Goldman Sachs analyst Brett Feldman even projected an overlap of approximately 4 million subscribers.
Despite the drop, WBD CEO David Zaslav emphasized the successful transition of subscribers to Max during the earnings call, stating, “The migration to Max has gone exceedingly well with the overwhelming majority of subscribers in the U.S. successfully transferred.” He further acknowledged some expected subscriber disruption but pointed out lower-than-expected churn in the process.
Launched on May 23, Max saw 70% of existing HBO Max subscribers make the switch within the first week, according to J.B. Perrette, WBD’s global streaming president. Although Discovery+ reportedly lost subscribers, Max’s rollout appears to be going smoothly.
An exciting development for Max is the introduction of live streaming capability, meaning subscribers will soon have access to live sports and news programming. While WBD did not disclose further details, an announcement on specific live content offerings is expected shortly.
The Q2 earnings report showed total revenues of $10.36 billion, falling short of Wall Street’s $10.46 billion forecast, and down from $10.7 billion in Q1. The net loss for the quarter was $1.24 billion, up from the previous quarter’s $1.07 billion. Since the merger, WBD has managed to pay down $9 billion in debt, including $1.6 billion this quarter.
WBD had earlier predicted that its U.S. direct-to-consumer business would turn profitable this year, a forecast made before the Max launch in the first quarter of 2023. The Q3 report will offer a more comprehensive insight into Max’s performance as it will fully account for the service’s results.