(Reuters) – Warner Bros Discovery missed first-quarter revenue estimates on Thursday, weighed down by a lack of big box office hits from its studios and weakness in its traditional TV business as consumers continued to abandon cable for streaming.
Like others in the media business, Warner Bros Discovery is losing thousands of cable TV subscribers each year, putting pressure on the company to consistently produce hit content and boost profitability in its streaming business.
The threat of U.S. tariffs on foreign-made films has also added to the headaches of an industry whose biggest-budget films are often produced across several continents.
WBD struggled in the January-March quarter to replicate the success of last year’s “Dune: Part Two,” which grossed more than $700 million. The company’s marquee release for the period, Bong Joon Ho’s sci-fi dark comedy “Mickey 17,” earned only slightly more than its reported budget at the box office.
That meant studios revenue fell 18% to $2.31 billion, missing estimates of $2.73 billion, according to Visible Alpha.
The company has, however, made a strong start to the second quarter with Ryan Coogler’s horror film “Sinners” and the blockbuster “A Minecraft Movie,” which has raked in around $900 million globally, making it the biggest release of 2025 so far. Its summer lineup also looks strong with “Superman,” directed by Marvel’s long-time hitmaker James Gunn, set to release in July.
Revenue at the TV networks segment, which includes CNN, Discovery Channel and Animal Planet, fell 7%, with advertising revenue in the business declining 12% as marketers avoided cable TV amid cord-cutting by subscribers.
Overall, revenue fell 10% in the first three months of 2025 to $8.98 billion, missing analysts’ average estimate of $9.60 billion, according to data compiled by LSEG. Loss of 18 cents per share was also larger than expectations for a 13-cent loss, even as costs declined 11.8%.
The company’s shares were down 1.9% in premarket trading.
Still, its streaming business was a bright spot.
WBD added 5.3 million streaming subscribers in the quarter, compared with 3.1 million estimated by analysts, according to Visible Alpha, taking its total to 122.3 million. The quarter featured some strong content slate including the third season of HBO’s “The White Lotus” and the medical drama series “The Pitt”.
The company also launched its Max streaming service in Australia earlier this year, following rollouts in more than 70 countries across Europe and Asia last year. Analysts say it has also benefited and reduced churn thanks to a streaming bundle combining Disney+, Hulu and Max that was introduced last year.
(Reporting by Aditya Soni in Bengaluru; Editing by Shounak Dasgupta)
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