HBO grows to 76.8 million subscribers, WarnerMedia’s profit slows on CNN+

WarnerMedia’s HBO and HBO Max added 3 million users at the end of the first quarter for a total of 76.8 million subscribers — but heavy investments in streaming services, including the flopped CNN+, hurt profits.

WarnerMedia’s surge in subscribers — fueled by hits like “Succession,” “Game of Thrones,” and “Euphoria” — comes days after streaming giant Netflix reported its first loss of subscribers in over a decade, demonstrating the streaming market’s potential for growth question.

Netflix has about 222 million paying households, but it estimates 100 million households share passwords and indicated it would take action in the near future.

On Thursday, AT&T announced WarnerMedia earnings for the last time since the entertainment unit spun off to Discovery earlier this month to form Warner Bros. Discovery.

Zendaya a "euphoria" season 2
Euphoria, starring Zendaya (pictured here), has grown into one of HBO Max’s biggest shows.
Eddy Chen/HBO Max/The Hollywoo

AT&T said that with the closing of the $43 billion merger shortly after the end of the first quarter, WarnerMedia, which includes Warner Bros., the Turner Networks and HBO, increased its first-quarter revenue by 2.5 percent to 8 $.7 billion was up due to higher subscription revenue and increased “content and other” revenue.

Ad revenue, however, fell 3 percent to $1.7 billion, due in part to “hard” comparisons with high political ad spend a year ago and fewer cable subscribers.

WarnerMedia’s operating income fell 32.7 percent to $1.3 billion, reflecting higher spending on the launch of HBO Max in new international markets and the launch of CNN’s beefed-up streaming service CNN+, as well as steeper “programming, Marketing and selling expenses”.

Jeremy Strong a "successor"
Shows like “Succession,” starring Jeremy Strong, have helped HBO/HBO Max build its subscriber base, but spending on content has also weighed on parent company WarnerMedia’s profitability.
Macall Polay

As former reporter David Zaslav, CEO of the new Warner Bros. Discovery, plans to achieve over $3 billion in cost savings in 2023 and has his sights set on CNN+, which launches March 29. CNN+ is already under review by Zaslav, who has stopped marketing spend on the service with around 150,000 subscribers, Axios reports.

The publication told CNN original plan to become profitable in four years by investing $1 billion in the service it is “kneeling” citing plans to eliminate senior positions at WarnerMedia. This includes potentially replacing Chris Cuomo’s 9 p.m. ET primetime slot with a “live newscast in lieu of personality-focused perspective programming.”

In this photo illustration the HBO Max logo is shown on a smartphone, along with a bowl of popcorn, headphones, and a TV remote control.
Warner Bros. Discovery’s new management plans to combine its various streaming services and build around HBO Max.
SOPA Images/LightRocket via Gett

Cuomo was fired from CNN in February after being suspended for advising his brother, the then governor. Andrew Cuomo on how to dodge his own sexual harassment allegations. The host has sued CNN for $125 million over his termination.

Looking ahead, Warner Bros. Discovery CEO Zaslav said he plans to focus CNN more on hard news and less personality-centric programming, and to consolidate the company’s various streaming platforms into one service built around HBO Max . HBO grows to 76.8 million subscribers, WarnerMedia’s profit slows on CNN+


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