WBD reports mixed earnings: Streaming up, Ad revenue down amid linear TV decline

Warner Bros. Discovery (WBD) has released its 2024 fourth-quarter and full-year financial results, painting a picture of a company in transition. While streaming growth provided a bright spot, the company grappled with declines in its traditional linear television business.

The report revealed a mixed financial performance. Total revenues for the fourth quarter reached $10.0 billion, a slight 1% decrease compared to the previous year, when adjusted for foreign exchange. For the full year, revenues totaled $39.3 billion, a 4% decline.

A key driver of the company's performance was its Direct-to-Consumer (DTC) segment. WBD reported significant growth in its streaming subscriber base, ending the fourth quarter with 116.9 million subscribers, an increase of 6.4 million from the previous quarter. This growth contributed to a 6% increase in DTC revenue.

However, the company's traditional Networks segment faced significant headwinds. Advertising revenue within this segment declined by 16%, reflecting the ongoing shift away from linear television. Distribution revenue also saw a decrease, driven by declining pay-TV subscriber numbers.

The company's Studios segment showed strong performance in the fourth quarter, with revenues increasing by 16%, primarily due to growth in TV content licensing.

WBD reported a net loss of $494 million for the fourth quarter and a substantial $11.3 billion loss for the full year. These losses were significantly impacted by acquisition-related expenses and a large goodwill impairment charge within the Networks segment.

Key takeaways from the report include:

DTC Growth: Warner Bros. Discovery is seeing strong subscriber growth in its streaming division, showing that the company is adapting to the changing viewing habits of consumers.
Linear TV Decline: Traditional television networks are facing continued challenges, with declining advertising and subscriber numbers.
Financial Impacts: Large financial charges are impacting the companies bottom line.

The company's leadership emphasized its commitment to navigating the evolving media landscape, focusing on its streaming services while adapting to the challenges facing its traditional businesses.

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