WBD marks streaming profit in 2023, plans international Max push

Warner Bros. Discovery on Friday disclosed achieving profitability for its streaming business in 2023, with international efforts for Max getting underway in 2024.  That includes this week’s planned roll out of the Max SVOD in Latin America, followed by additional market launches later this year.  

In fourth quarter and full year 2023 earnings, WBD reported $103 million in annual Adjusted EBITDA for its direct-to-consumer business -  marking a profit and a major improvement compared to the end of 2022 when its DTC segment generated an Adjusted EBITDA loss of $2.06 billion. WBD attributed the streaming improvement to growth across all revenue streams, alongside more efficient marketing spend and lower content expense. With international regional relaunches and new market rollouts teed up for the first half of the year, WBD expects EBITDA for its streaming business to be modestly negative in the first half of 2024 before again achieving profitability both in the second half and for the full year. On the earnings call, WBD CEO David Zaslav said the company feels good about being on track to achieve its guidance of $1 billion in streaming segment EBITDA in 2025.

In Q4 WBD netted 500,000 streaming subscriber additions compared to Q3, excluding acquisitions in the period. WBD’s total DTC subscriber tally reached 97.7 million as of the end of December, which included the addition of approximately 1.3 million subscribers from its purchase of BluTV. Once again, subscriber additions in international markets outpaced losses domestically in the U.S. and Canada. Domestic streaming subscribers were down 600,000 sequentially to 52 million. International subscribers, meanwhile, drove gains - ticking up by more than 1 million compared to Q3, for an international base of 45.6 million.

Domestically, Zaslav acknowledged impacts partly from the dual Hollywood actors and writers strikes last year that largely halted productions and left Max with less fresh tent-pole content than the company wanted. He emphasized the return of a strong content slate for Max, citing early success of its most recent season of True Detective, and next quarter series including Hacks and House of the Dragon debuting, followed by DC’s The Penguin and a new series based off of the Dune novels and films.  In 2025 new seasons of popular series are also set to return, including White Lotus, The Last of Us and Euphoria. On the theatrical side, Max is also soon getting films, such as Wonka in March and Dune: Part Two in the spring.

Despite a sparse content slate, the chief executive noted that Q4 saw “the lowest U.S. churn rates in HBO Max and Max’s history,” with the expectation that personalization and product improvements planned for 2024 will continue to positively impact the metric.  

And as WBD looks to grow Max as a profitable business, it’s now also focusing attention on markets outside of the U.S., where Zaslav cited rollouts in key international regions as one of its meaningful growth levers. That involves rollouts Latin America this week, followed by markets in EMEA and APAC later this year, including France and Belgium to coincide with the Paris Olympics this summer.

Zaslav noted Max is only available “in less than half of the addressable households and markets” compared to larger streaming peers.

“So we still have a huge opportunity for growth and globalization over the next two years, including many critical markets around the globe, such as the UK, Germany, Italy, Australia and Japan,” he commented Friday. He added that in these markets WBD has “a substantial amount of local content,” as well as sports in many.

WBD CFO Gunnar Wiedenfels also pointed to relaunches and rebranding in existing Latin American and European markets over the next few months as “critical to bringing consumers an improved product experience and a more robust content offering, which will put us on better competitive footing.”

 Expanding the ad-supported tier of Max internationally is also part of the play, which Zaslav said drives better segmentation and monetization. Currently Max’s ad-lite subscription is only available in the U.S. but will expand to over 40 markets globally by the end of 2024.

“We also have a number of lucrative partnership deals internationally that will help us scale in more efficient and accelerated fashion,” he said.  

And Wiedenfels noted that international “remains the most important driver of our DTC subscriber growth,” contributing over 1 million subscribers in the quarter and more than offsetting domestic declines.

In Q4 international streaming ARPU of $3.88 was down sequentially from $3.98 in Q3, but up year over from $3.45 in Q4 2022.  

Quarterly DTC results

In Q4, WBD’s DTC revenue grew 3% year over year to $2.5 billion. That included 4% distribution revenue growth, attributed to new partnership launches, price increases in the U.S. and international markets and favorable shifts from wholesale to retail. DTC advertising revenue also expanded, reaching $186 million in Q4, up 51% over the prior year quarter, which WBD attributed to higher engagement with Max in the U.S. and subscriber growth for its ad-lite tier.  DTC content revenue was down 30% to $171 million driven by the timing of third party licensing. WBD also lowered streaming operating expenses in Q4 by 3% year over year to $2.58 billion, while its Q4 Adjusted EBITDA loss of $55 million improved by $162 million year over year.

Other earnings tidbits

  • WBD’s chief executive commented on talks for lucrative NBA sports rights, saying “we are now fully engaged in renewal discussions, and they are constructive and productive.”
  • Zaslav said consumers will be able to bundle the Max streaming service with a new sports-focused streaming app being developed as part of a joint venture with Fox and Disney. WBD expects the JV as another potential driver of incremental growth for the business
  • The sports streaming JV is going after the more than 60 million households that aren’t in the traditional bundled cable ecosystem and doesn’t see “a lot of people unsubscribing to cable in order to get this,” Zaslav said. “We’re going to be aggressive marketing it, and we think it coexists very effectively."


  • In Q4 Studio segment revenues declined 18% yoy to $3.2 billion.  
  • WBD linear networks segment quarterly revenue was down 8% yoy to $5 billion, including a 14% dop in advertising revenue, which totaled $1.9 billion in Q4.
  • Total WBD Q4 revenue was down 7% to $10.3 billion. Total quarterly adjusted EBITA of $2.5 billion was down 5% yoy.