Warner Bros revenues dip amid box office struggles

Warner Bros Discovery, the media powerhouse behind notable releases like A Minecraft Movie and hit TV series The Last of Us, has reported a challenging first quarter. The company posted revenues of $8.98 billion, missing analysts’ expectations of $9.61 billion and reflecting a 10 per cent decline year-on-year. Despite this, shares rose 4.9 per cent in New York trading, buoyed by positive signs in its streaming business and a recovery from losses in 2024.

The studio division of Warner Bros saw a steep 18 per cent fall in sales, generating $2.3 billion for the quarter – well below expectations of $2.85 billion. Poor box office performance by the sci-fi film Mickey 17, starring Robert Pattinson, contributed to the underwhelming results. In contrast, the division saw successes, including A Minecraft Movie, which grossed an impressive $900 million globally, and the critically acclaimed Sinners, delivering $250 million in revenues.

Streaming offered a more optimistic story. Warner Bros reported 122.3 million streaming subscribers for the first quarter, exceeding forecasts of 119.8 million. Much of this growth stemmed from international markets, with the launch of HBO Max in Australia proving a strong catalyst. Streaming revenues rose 8 per cent year-on-year to $2.6 billion, with adjusted earnings jumping from $86 million to $339 million, a promising signal amid broader industry challenges.

The continuing success of HBO’s The White Lotus contributed to the robust results for the division. The third season of the drama has averaged over 25 million global viewers per episode, a sharp increase of more than 40 per cent compared to the second season, making it a standout hit for the company.

However, traditional cable TV operations remain a concern. Sales for the TV networks segment, which includes CNN and Discovery Channel, fell by 7 per cent to $4.8 billion. Advertising revenue also decreased by 8 per cent year-on-year to $1.98 billion, primarily due to declining US domestic audiences. International networks fared better, with Poland and Italy named strong performers. The Europe, Middle East and Africa region now represents nearly a fifth of cable network advertising revenues.

While Warner Bros continues to face headwinds in traditional media, its investment in global streaming content and franchise-driven hits is starting to yield results. Subscribers worldwide are embracing its offerings, showcasing a continued appetite for the company’s digital-first strategies.