TV & Video Week in Review

Report Type: 
Week In Review

WBD and Paramount Global report Q4 earnings

Recently, both Warner Brothers Discovery and Paramount Global reported their respective Q4 results. And, while streaming was a highlight for each media conglomerate, it did little to appease Wall Street. Each company’s stock took a plunge the day after results were announced, nearing record lows. Both companies attributed the losses to the same overall market trends: soft ad sales, fallout from the dual 2023 strikes, and the struggles of running a declining linear TV business. DTC was one of the few bright spots for each company, with WBD posting the first full-year profit from streaming from a company not named Netflix.

For Paramount+, revenue was up 69% (DTC ads were up 14%) and global subs rose 4.1MM to 67.5MM. Paramount also announced 27% more viewing hours on Paramount+ and Pluto TV, and overall earnings beat estimates, but every other major metric was down year over year for the parent company (film revenues -31%, licensing -32%, linear ads -15%).

For WBD, a similar tale was told with overall revenue down 7%, adjusted earnings down 5%, studios down 30%, and linear off 11%. Domestic subs for Max were down 600k to about 52MM, while global subs were up over a million to about 45.6MM. Peculiarly, WBD offered no 2024 guidance, indicative of the short-term challenges facing global entertainment. So, while WBD generated a massive $6.2 billion in free cash flow, it wasn’t the highlight investors were looking for.

The Circana Take:

  • WBD is a huge media conglomerate, as such, streaming is merely one piece of an ever-complicated puzzle. Of note, the streaming profitability achievement includes revenue from HBO, so some may view this milestone as thumbing the scale. While it’s an important milestone, investors are showing they care more about the health of the entire corporation. 
  • Paramount’s future has been the source of rumors for months now, and any success in streaming may be short-lived, as discussions continue about potentially selling all or part of Paramount Global. Wall Street seems to view Paramount’s success in streaming as possibly too little, too late, with too much distance to make up against the bigger players. Expect continued uncertainty around Paramount’s future and the role that the company’s assets play in the future of streaming at large.