Superman Soars But Can’t Rescue Warner Bros. Discovery’s Linear TV Slump

Warner Bros. Discovery reported its third-quarter earnings on Thursday. The media giant saw a notable lift from its box office hit, Superman. However, declining linear television revenue continued to drag down overall results.

According to company filings, total revenue fell 6% year-over-year to $9 billion. The company posted a net loss of $148 million. This highlights the ongoing challenge of transforming a legacy media business in the streaming era.

Studio Division Powers Ahead on Blockbuster Strength

The studio segment was the clear star this quarter. Revenue surged 24% to $3.3 billion. This dramatic growth was powered by the global theatrical success of Superman.

Other major releases like Weapons and The Conjuring: Last Rites also contributed. Television studio revenue saw a slight dip. The company delivered fewer episodes compared to the same period last year.

Executives warned of a tougher fourth-quarter comparison. This is due to a prior major licensing deal with HBO Max. Despite this, leadership expressed strong confidence in the film strategy moving forward.

Linear Networks and Streaming Face Divergent Paths

In contrast, the networks division faced significant pressure. Revenue for linear TV channels dropped 22% to $3.9 billion. Advertising revenue alone fell by 20%, a stark decline reported by Reuters.

Cord-cutting continues to erode distribution revenue. The segment also faced a tough comparison to last year’s Olympic and election coverage. This division remains the company’s largest cash-flow generator, but its decline is accelerating.

Streaming told a more mixed story. Global subscribers grew by 2.3 million, reaching 128 million. The streaming segment’s revenue was flat at $2.6 billion, but advertising within it grew 15%.

The latest Warner Bros. Discovery earnings reveal a company at a crossroads, where the explosive power of its cinematic universe is not enough to offset the structural decline of its traditional television business. The path forward hinges on navigating this delicate balance.

Info at your fingertips

Q1: How did the *Superman* movie perform for Warner Bros.?

The film was a major financial success. It helped drive the studio segment’s revenue up by 24% this quarter. This made it a key highlight in an otherwise mixed earnings report.

Q2: Is Warner Bros. Discovery streaming service growing?

Yes, the streaming subscriber base is growing. It added 2.3 million subscribers globally last quarter. Advertising revenue on the platform also saw strong growth of 15%.

Q3: Why did linear TV advertising revenue fall so much?

Advertising revenue dropped 20% year-over-year. This was due to lower overall viewership on traditional cable channels. The comparison was also difficult against last year’s major events.

Q4: What is the company’s strategic review?

The company is exploring major structural options. This includes a potential separation of its Warner Bros. and Discovery businesses. Executives provided no new update on this review during the earnings call.

Q5: Are they launching new streaming apps?

Yes, the company confirmed it is developing a new TNT Sports streaming app. It also recently launched a standalone CNN app, which leadership said is “off to a very good start.”