In Q2 2023, WB Discovery lost 1.8 million DTC subscribers globally, though it recorded a slight increase in ARPU. We discuss the loss, DTC profitability, and what to expect going forward.
Top news stories (1:00)
WB Discovery reports improved performance in Q2 2023 (9:10)
WB Discovery lost direct-to-consumer subscribers in Q2 2023 but improved its average revenue per unit (ARPU) sufficiently to gain overall revenue.
The company had forecast that its direct-to-consumer would be profitable in 2024. However, the business was almost profitable in the second quarter, and the company now forecasts it will be profitable this year.
Dissecting the numbers (14:00)
The company’s explanation for the drop in subscribers pointed the finger at Discovery+ subscribers canceling because they were also HBO Max (now Max) subscribers. However, the numbers don’t add up, leaving a million losses still unexplained. The company also claimed extraordinary engagement times with Max, but it didn’t back it up with hard data.
Mid-roll ads coming to HBO content in Max (15:50)
JB Perrett, CEO & Pres Global Streaming & Games, says the company has already begun running more ads in the HBO content as part of Max:
“We just started in February, as you know, with putting advertising units in our most highly valued, most premium content in terms of HBO and some of the legacy HBO library series.”
The company also believes it will more than recover the $5 discount for the ad-supported tier.
Sports and news will be important to MAX (18:20)
The company says it has full digital rights to the sports it licenses and is not fully leveraging them. Specifically, executives talked about leveraging NHL in MAX, although they suggested there would be an additional charge to watch the games.
