Discovery reached 24 million streaming subscribers before the WarnerMedia merger in late March –

Before merging with WarnerMedia, which created Warner Bros. earlier this month, Discovery, led by Discovery CEO David Zaslav, reached 24 million streaming subscribers worldwide at the end of March. March.

This was between 22 million at the end of 2021 and 20 million as of September 30. The company on Tuesday presented its results and operating updates for the quarter before the merger, in addition to reporting better-than-expected earnings per share.

WarnerMedia’s HBO and its HBO Max streaming service ended March with 76.8 million global subscribers, up 3 million after reaching 73.8 million subscribers at the end of 2021, according to telecom giant AT&T last week. , in the final disclosure of the group.

On Tuesday, Discovery clarified that it defines a direct customer subscription (DTC) as “1) a subscription to a DTC product for which we recognize DTC platform subscription revenue; 2) Subscriptions obtained through wholesale contracts, for which we charge for the distribution of our DTC platforms, as well as subscriptions provided directly or through third-party platforms; and 3) a firm recognized by certain partners and subsidiaries of the joint venture.” It also revealed that “a subscription only counts if it is in a paid status and excludes users from a free trial. At the end of each quarter, subscribers include the actual number of paying customers within seven days of the end of the quarter.

But there is a special case due to the war in Ukraine. “The number of our quarterly subscribers continues to include Ukrainian Discovery+ subscribers who temporarily receive the service for free, the sum of which is not significant,” the company said.

Tuesday’s Q1 earnings report, the final tally for Discovery to operate as an independent company before the megamerger, also showed a 5% increase in US ad revenue and an 11% increase in ad revenue. In the USA. Discovery+. Guggenheim analyst Michael Morris recently slightly raised his first-quarter ad revenue forecast to close the preliminary deal with Discovery. His forecast was for a 4.0% increase in ad revenue to over $1 billion in the first quarter, including a 5.7% increase in advertising to $460 million.

In Discovery’s international business, advertising revenue increased 11%, excluding currency impacts, helping the company’s Winter Olympics in European markets. Distribution revenue saw an 8% increase thanks to Discovery+.

First-quarter total revenue increased 15%, or 13%, after a currency impact to $3.16 billion. This included nearly $450 million, up 55% from a year ago, in what the company calls “next-generation revenue,” which it defines as subscription and advertising revenue from the company’s DTC products. TV Everywhere, our Go apps and other digital resources.”

Quarterly net income increased to $456 million, or $0.69 per share, from $140 million, or $0.21 per share, a year earlier. Finally, it benefited from total operating expenses, which fell 8% to $907 million. Revenue costs increased 14%, “primarily due to higher amortization of content on Discovery+, launched in January 2021, and online networks”, but selling, general and administrative costs fell 25%, “primarily due to lower costs Of marketing”. “Discovery+ compared to last year’s launch period,” the company said.

Warner Bros. Together with Discovery, we are building a clean gaming media company with diversified revenues and the most compelling portfolio of brands, franchises and intellectual property in our industry,” said Warner Bros. Zaslav, President and CEO of Discovery. “It’s important that we also have an unparalleled global presence to get our content into the hands of users on all screens. We created a framework and strategic organization to develop our balanced approach to growing our business and maximizing the value of our stories, news and sports. To that end, we’ve assembled a strong leadership team into a streamlined structure to promote better management and control and strategic clarity across the enterprise. I couldn’t be more excited about the big opportunity to come. ”

Morris is also in the mood for a united company. “We see attractive long-term potential for the combined unit, although we have a limited vision.
“Market strategy and potential selling pressures from AT&T’s major shareholders, followed by distribution as a short-term headwind,” he wrote in a recent report.

The CFO of Warner Bros. Discovery’s Gunnar Wiedenfels recently said that combining the buying power of HBO Max subscribers with the content retention power of Discovery+ “will create a DTC (direct customer) product and that will inevitably lead to very healthy revenue growth.” for years. Discussing the direct customer strategy after the merger, he said it includes the Discovery+ and HBO Max starter package, leading to the merging of both streaming services into a single customer offering and platform. “In the meantime, we will start working on a temporary solution. “So we’re working on a packaged approach, possibly for a single company,” he said.

Fixed: Temporarily missing the title of this post by M million in the old title.