For Warner Bros. Discovery, volume is up, but subscribers … not so much.
During an earnings call today, Warner Bros. Discovery’s CEO David Zaslav revealed the company is “nearly completed” with its upfront talks, with volume up and pricing levels “consistent” with the previous year. In 2022, the company earned low- to mid-teen CPM (cost per thousand viewers reached) increases and nearly $6 billion in upfront commitments in its first year as a combined company.
Gunnar Wiedenfels, the company’s CFO, also announced that, in addition to linear volume being up, “DTC volume is up more than 50% in the marketplace in which CPMs were positioned to drive scale for us as much as for the broader market.”
Regarding this year’s upfront, Zaslav called it a “very good result in a tough market.” With the news, the company is the fifth major upfront week presenter that’s wrapping up talks, following NBCUniversal, Fox, Paramount and TelevisaUnivision.
Along with the upfront announcement, the company revealed a global loss of 1.8 million subscribers in the same quarter where it launched Max, its new combined HBOMax and Discovery+ streamer, bringing its new total to 95.8 million across its platforms.
However, despite the losses, Zaslav said the launch has gone “exceedingly well,” with the company experiencing lower churn than expected and getting stronger engagement from subscribers.
The CEO acknowledged the soft ad market during the call, saying the company wasn’t seeing a “meaningful recovery” thus far, but said, “We just came out of an upfront that is encouraging, at least for us.”
To an analyst question on the ongoing shift from linear to streaming, Zaslav noted that sports were up mid-single digits for the company, there were price increases among some of its affinity networks, some of the smaller networks were slightly down and Max was the overall star, though it’s not at linear levels quite yet.
“We need to build up Max for now. There’s a huge demand for it,” Zaslav said, later adding, “We can’t predict what’s going to go on with the linear business, but we have a lot of command and control as I talked about earlier.”