Warner Bros. Discovery: Will The Direct-to-Consumer Strategy with No Middlemen Catalyze Growth?

Warner Bros. Discovery’s Q1 2024 earnings revealed progress and challenges for the media company. The company’s Direct-to-Consumer streaming service, Max, has been successful, gaining 2 million subscribers this quarter with total subscribers nearing the 100 million mark. However, the company anticipates that its U.S. subscriber count could decline in Q2 due to seasonal factors, predominantly related to sports broadcasts. The company reported an acceleration in Direct-to-Consumer ad sales and sequential improvement in linear ad sales for this quarter. This was facilitated by the March Madness men’s basketball tournament, among other factors. Warner Bros. Discovery also reported improved free cash flow this quarter, with a year-over-year improvement of $1.3 billion.