Max Streaming Service Struggles as It Reports Drop in Subscribers

Warner Bros. Discovery experienced a decline in streaming subscribers during the quarter in which it launched its new combined streamer, Max.

According to the Q2 earnings report released on Thursday, the conglomerate lost 1.8 million streaming subscribers from April 1 to June 30. As a result, the total number of streaming subscribers across Warner Bros. Discovery’s HBO, Max, and Discovery+ platforms now stands at 95.8 million.

To provide context, in the previous quarter (Q4 of 2022), HBO, HBO Max (now Max), and Discovery+ had added 1.1 million subscribers, bringing the total to 96.1 million worldwide. At the end of Q1 2023, U.S. streaming subscriptions increased by 1.6 million to reach 97.6 million across the three platforms.

The Max streaming service, which is a combination of HBO Max and Discovery+, was launched on May 23. Although the second quarter marked the initial period with the unified product, Q3 (July 1 to September 30) will be the first full quarter reflecting the results of Max.

Warner Bros. Discovery

Despite the decrease in subscribers, Warner Bros. Discovery reported positive financial performance, boasting $1.7 billion in cash flow for Q2. Additionally, the company announced it is increasing its post-merger synergy target to more than $5 billion.

Warner Bros. Discovery CEO David Zaslav expressed confidence in the company’s financial outlook, stating, “This quarter alone we reported over $1.7 billion in free cash flow, and we remain bullish with respect to our delevering story.”

Zaslav emphasized that they expect to comfortably reduce leverage and achieve their target of 2.5-3.0x gross leverage by the end of 2024. He also highlighted the success of the Direct-to-Consumer business, with Max’s launch in the U.S. surpassing financial projections and generating positive EBITDA in the first half of the year.

Despite the subscriber decline, Warner Bros. Discovery remains optimistic about its financial growth.

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