By Justin Anderson

Warner Bros. Discovery has cut its streaming losses by 75% since Q4 2023, and as a result, this part of the company’s business generated US$10.3 billion in annual revenue—which is down very slightly from US$11 billion last year.

In the Q4 and full-year earnings report it published today, the DTC unit (comprising Max, Discovery+ and pay-TV net HBO) posted US$103 million in profit this fiscal year, compared to a loss of almost US$2.1 billion in 2022.

In Q4 specifically, DTC revenue was up 3% year over year to more than US$2.5 billion, with price increases and higher ad revenue driven by ad-lite subscriber gains for Max playing a major factor. Overall, WBD now has 97.7 million global subscribers, including 1.3 million subscribers from its acquisition of Turkish streamer BluTV in December.

Looking ahead, WBD has slated its Harry Potter TV series adaptation for a 2026 launch on Max. And the lucrative Wizarding World IP helped drive Q4 revenue gains for the company’s gaming business, with Hogwarts Legacy expanding onto Nintendo Switch in November 2023. This title was the year’s top-selling game in the US, according to Circana.

“Bottom line: We’re a far healthier company now, and we’re building real momentum,” noted WBD CEO David Zaslav on the earnings call. “And we expect 2024 will be a year to drive that momentum forward even further. That said, this business is not without its challenges.” Among them is “a dislocated linear advertising ecosystem” that is dragging down the company’s earnings, particularly in its networks segment. Quarterly revenue from that division was down by 8% year over year to just over US$5 billion, mainly because of a drop in audience for entertainment and news, and a soft linear ad market in the US.

At WBD’s studios division, revenue was down by 18% in Q4 to nearly US$3.2 billion from the prior year. Content revenue dropped by 20% overall, with TV revenue taking the biggest hit due to the impact of the WGA and SAG-AFTRA strikes.

The company’s big-screen slate for Q4 included family features such as musical prequel Wonka (which has grossed US$608 million against a US$125-million budget) and DC flick Aquaman and the Lost Kingdom (which earned more than US$430 million globally, but had a heavier budget in the range of US$205 million to US$215 million).

But Zaslav remains bullish on superhero content, despite all the recent discourse about genre fatigue, with high hopes for the upcoming DC Studios feature Superman: Legacy, which is slated to hit theaters in 2025. “The studio has really been underperforming, including the end of the year, where we had some real struggle. But we’re very optimistic about this year, and it has given us the chance to have a lot of upside in the next two years.”

A version of this story originally appeared in Kidscreen Daily’s sister publication Realscreen Daily.

Featured image: Aquaman and the Lost Kingdom (2023)