Hollywood’s quarterly earnings report is here and Warner Bros. Discovery is in the hot seat. The company reported a $9 billion loss which accompanies an uphill battle to retain the NBA’s media rights. Disney, on the other hand, did better than Wall Street expected despite park attendance remaining low. Kim Masters and Matt Belloni are here to tell you what it all means.
Park life? Disney surpassed Wall Street estimates in profitable streamers by earning $41 million last quarter. In spite of the promising streaming revenue, Disney stock is down as investors are nervous about the softening visitations to the company’s amusement parks. Attendance has been low ever since COVID-19 lockdowns went into place, with equivalent spaces like Universal Studios seeing similar effects. “Disney has essentially leaned on the parks to fund its move into streaming,” says Belloni. “And there [are] some questions about whether the parks are going to be able to deliver at that level.”
Stream on? Two of Disney’s biggest 2024 rollouts — Inside Out 2 and Deadpool & Wolverine — are proving to be highly profitable at the box office. But this ability to deliver in a movie theater setting doesn’t necessarily translate to streaming subscriptions. Disney leverages the promise of profit from these franchises to increase prices, but where service shines is ESPN+. The sports network is part of Disney’s bundle offer (along with Hulu) and is currently its biggest selling point — streaming wise.
What’s next for WBD? Warner Bros. Discovery marked $9 billion in losses in this quarter’s report, citing a dwindling linear television market. The company has not figured out how to replace linear TV revenue with streaming. Making matters worse, the NBA opted not to renew its media rights deal with Warner Bros. Discovery, instead turning to Amazon. Though Warner Bros. is suing the NBA to maintain the rights, a successful litigation seems far off. “It's getting really scary — Warner Brothers being the first among legacy studios, and now looking so weakened. Where does it go?” says Masters.