The future of overlapping streaming product lines has been a key question from the first time that the mega merger of Warner Bros. and Discovery was mooted, and is now top of the agenda after the media giant posted a disappointing second quarter of 2022.
For the quarter ended 30 June 2022, Warner Bros. Discovery Q2 reported total revenues $9.827 billion, with pro forma combined revenues decreasing 1% ex-FX compared with the prior year quarter. this contributed to the media company reporting a $3.418 billion loss including $2.004 billion of amortisation of intangibles, $1.033 billion of restructuring and other charges, and $983 million of transaction and integration expenses. Total reported Adjusted EBITDA was $1.664 billion and pro forma combined adjusted EBITDA decreased 31% on an annual basis.
For David Zaslav, president and chief executive officer of Warner Bros. Discovery, the second quarter was part of a “busy, productive” four months since launching the company, leaving him with more conviction than ever in the “massive” opportunity ahead. “We have the most powerful creative engine and bouquet of owned content in the world, as highlighted by our industry leading 193 Emmy nominations, and we intend to maximize the value of that content through a broad distribution model that includes theatrical, streaming, linear cable, free-to-air, gaming, consumer products and experiences, and more, everywhere in the world,” he said.
In the company’s second quarter results earnings call, Zaslav said that the main priority would be to launch an integrated subscription video-on-demand (SVOD) service combining the assets of Discovery+ and HBO Max and that the firm was also assessing options regarding a free ad-supported streaming TV service.Revenues at the firm’s Networks division were $5.742 billion, representing a pro forma combined increase of 1% compared with the previous year. Pro forma combined advertising revenue increased 2% ex-FX, primarily driven by strong demand for sports advertising, partially offset by lower news, kids, and general entertainment performance in the US.
International networks were impacted by modest declines in EMEA, offset by growth in Latin America, excluding the impact of Chilevisión, which was sold in September 2021. Pro forma combined distribution revenue decreased 1% ex-FX, as increases in U.S. contractual affiliate rates were more than offset by a decline in linear subscribers in the U.S. and lower contractual affiliate rates in some European markets.
Networks reported an adjusted EBITDA of $2.262 billion. Pro forma combined Adjusted EBITDA decreased 11% ex-FX compared to the prior year quarter.
The company ended Q2 with 92.1 million global direct-to-consumer (DTC) subscribers, an increase of 1.7 million compared with those at the end of Q1, as adjusted for the company's new DTC subscriber definition. The new definition resulted in the exclusion of 10 million legacy Discovery non-core subscribers and unactivated AT&T mobility subscribers from the Q1 subscriber count. DTC reported revenues were $2.225 billion. Pro forma combined revenues increased 4% ex-FX compared to the prior year quarter.
For David Zaslav, president and chief executive officer of Warner Bros. Discovery, the second quarter was part of a “busy, productive” four months since launching the company, leaving him with more conviction than ever in the “massive” opportunity ahead. “We have the most powerful creative engine and bouquet of owned content in the world, as highlighted by our industry leading 193 Emmy nominations, and we intend to maximize the value of that content through a broad distribution model that includes theatrical, streaming, linear cable, free-to-air, gaming, consumer products and experiences, and more, everywhere in the world,” he said.
In the company’s second quarter results earnings call, Zaslav said that the main priority would be to launch an integrated subscription video-on-demand (SVOD) service combining the assets of Discovery+ and HBO Max and that the firm was also assessing options regarding a free ad-supported streaming TV service.Revenues at the firm’s Networks division were $5.742 billion, representing a pro forma combined increase of 1% compared with the previous year. Pro forma combined advertising revenue increased 2% ex-FX, primarily driven by strong demand for sports advertising, partially offset by lower news, kids, and general entertainment performance in the US.
International networks were impacted by modest declines in EMEA, offset by growth in Latin America, excluding the impact of Chilevisión, which was sold in September 2021. Pro forma combined distribution revenue decreased 1% ex-FX, as increases in U.S. contractual affiliate rates were more than offset by a decline in linear subscribers in the U.S. and lower contractual affiliate rates in some European markets.
Networks reported an adjusted EBITDA of $2.262 billion. Pro forma combined Adjusted EBITDA decreased 11% ex-FX compared to the prior year quarter.
The company ended Q2 with 92.1 million global direct-to-consumer (DTC) subscribers, an increase of 1.7 million compared with those at the end of Q1, as adjusted for the company's new DTC subscriber definition. The new definition resulted in the exclusion of 10 million legacy Discovery non-core subscribers and unactivated AT&T mobility subscribers from the Q1 subscriber count. DTC reported revenues were $2.225 billion. Pro forma combined revenues increased 4% ex-FX compared to the prior year quarter.
