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Warner Bros Discovery falls short of revenue projections, attributed to weak performances at the box office

First-quarter earnings for Warner Bros Discovery fell short of expectations, primarily due to a weak cinema industry and decreasing conventional TV viewership as viewers migrate to streaming platforms. However, the company's streaming sector displayed expansion, securing an addition of 5.3...

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Struggling first-quarter earnings at Warner Bros Discovery, influenced by poor box office showings...
Struggling first-quarter earnings at Warner Bros Discovery, influenced by poor box office showings and a decrease in traditional TV audience due to the shift towards streaming. Yet, there's a silver lining in the form of growth in their streaming sector, with an increase of 5.3 million subscribers. The momentum of releases like "A Minecraft Movie" suggests a hopeful second quarter.

Warner Bros Discovery falls short of revenue projections, attributed to weak performances at the box office

Warner Bros Discovery Falls Short on First-Quarter Revenues

Warner Bros Discovery reported a 10% drop in first-quarter revenue to $8.98 billion, missing analyst predictions. The decline was attributed to a dearth of blockbuster films and a downturn in traditional television advertising revenue.

The company's studio revenue took a hit, plummeting 18% to $2.31 billion. The promising release 'Mickey 17' underperformed at the box office, whereas the successful launch of 'A Minecraft Movie' in the second quarter resulted in global earnings of around $900 million.

Despite challenges in the cable television sector, Warner Bros Discovery's streaming business saw an increase, adding 5.3 million subscribers, bringing the total to 122.3 million. The rise can be attributed to a robust content lineup and a streaming bundle with Disney+ and Hulu.

Reuters

Published On May 9, 2025 at 01:00 PM IST

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Several factors contributed to Warner Bros Discovery's drop in revenue:

  1. Content Revenues: Revenues from content fell 27% due to lower box office and home entertainment earnings.
  2. Lack of Major Game Releases: The games department saw a 48% decline due to fewer significant game releases in Q1 2025. The absence of major releases like Hogwarts Legacy and Mortal Kombat 1 from the previous year affected the revenue comparison.
  3. Linear Networks: The company's linear networks witnessed a 7% year-over-year revenue decline, mirroring the shrinking viewership of linear TV across the industry.

While 'A Minecraft Movie' boosted Warner Bros Discovery's box office performance, grossing nearly $900 million worldwide, 'Mickey 17' and 'Dune: Part Two' did not play a significant role in the first-quarter revenue decline since 'Mickey 17' was not mentioned in the context of the drop, and 'Dune: Part Two' has not yet been released.

  1. The decline in Warner Bros Discovery's first-quarter revenue was not only due to a dearth of blockbuster films, but also because of lower revenues from content, which saw a 27% drop.
  2. Apart from the dearth of blockbuster films, the games department experienced a 48% decline in revenues due to a lack of major game releases like Hogwarts Legacy and Mortal Kombat 1 in Q1 2025.
  3. The traditional television advertising revenue at Warner Bros Discovery also took a hit, reflecting the industry-wide trend of decreasing viewership of linear TV, as the company's linear networks witnessed a 7% year-over-year revenue decline.

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