Warner Bros. Discovery Inc. released its quarterly financial results on Nov. 7 and it wasn’t pretty.
The New York-based owner of Warner Bros. Entertainment in Burbank, reported a net income of $135 million (5 cents a share) for the quarter ending Sept. 30, compared to a net loss of $417 million (-17 cents) in the same period of the previous year.
Revenue decreased by 4% from the third quarter of the prior year to $9.6 billion.
The Burbank film and television studio contributed $2.7 billion to the total revenue figure, or a decrease of 17% compared to the previous year’s $3.2 billion.
The theatrical box office had dropped its revenue during the quarter by 40% “primarily driven by the lower box office revenue as the performance of “Beetlejuice Beetlejuice” and “Twisters” in the current year was more than offset by the stronger performance of “Barbie” in the prior year,” the company said.
“Barbie” starring Margot Robbie as the doll herself and Ryan Gosling as Ken, brought in $636 million in domestic box office receipts while “Beetlejuice Beetlejuice” brought in $294 million domestically and “Twisters” brought in $268 million in domestic box office sales, according to Box Office Mojo.
Including international box office numbers, “Barbie” surpassed the $1 billion mark.
Games revenue declined by 31% primarily due to the better performance of the prior year slate, mainly “Mortal Combat 1,” compared to the current year slate, the company said.
“TV revenue increased 30%, primarily driven by higher initial telecast revenue as a result of the impact from the WGA (writers) and SAG-AFTRA (actors) strikes in the prior year,” it added.
Studio operating expenses decreased 5% to $2.4 billion compared to the prior year quarter.
When it came to streaming services, Warner Bros. Discovery performed a bit better this year compared to last year.
Direct-to-Consumer business segment revenues increased by 8% to $2.6 billion versus the $2.4 billion in the prior year’s third quarter.
Distribution revenue increased 6%, primarily driven by a 15% increase in subscribers, as well as higher pricing, following the launch of Max in Latin America and Europe during the first half of the year, partially offset by continued domestic linear wholesale subscriber declines.
Advertising revenue increased by 49% to $205 million “primarily driven by an increase in domestic ad-lite subscribers,” the company said.
Total domestic subscribers in the direct-to-consumer segment was flat at 52.6 million while international subscribers increased by nearly 34% from 43.3 million in the third quarter last year to 57.9 million in the current quarter.
The average revenue per user for domestic subscribers was $11.99, compared to $11.29 in last year’s third quarter for an increase of 6%. International subscribers also had an increase in their average revenue per user. It went up to $4.05 in the current third quarter from $3.98 in the same period of the previous year for an increase of just about 2%.
Warner Bros. Discovery Chief Executive David Zaslav said that due to the company’s rapid international expansion and continued investment in high quality and diverse content, it saw momentum accelerate to the global direct-to-consumer business in the third quarter.
In total, Max delivered 7.2 million net subscriber adds, making it the strongest quarterly gain since the platform’s launch in May 2020 as HBO Max, resulting in healthy subscriber-related growth and meaningful progress toward achieving its 2025 segment financial objectives, he said.
