Topline
Warner Bros. Discovery’s stock experienced one of its strongest days of trading in recent months on Thursday, after the media conglomerate announced a deal with Charter Communications that will bring the Max streaming service to standard cable packages.
Warner Bros. Discovery shares closed up 72 cents. (Photo Illustration by Budrul Chukrut/SOPA ... [+]
Key Facts
Warner Bros. Discovery shares closed up 10.3% at $7.66, recovering from recent losses that brought their price as low as $6.94 Wednesday.
The company’s stock is now up more than 13% in the past month but are well below their July highs, when shares traded as high as $8.18—and down substantially from their 2021 high of over $77.
Warner Bros. Discovery’s deal with Charter will bring ad-supported versions of Max and Discovery+ to Spectrum cable customers at no extra charge, making obsolete the $15 add-on fee customers currently pay if they want to add Max to their cable package.
Spectrum customers already have access to a $65 cable bundle including basic tiers of competing services Disney+ and Paramount+.
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Big Number
More than 33%. That is how far Warner Bros. Discovery shares have dropped since January, when they traded upwards of $11.60.
Key Background
Warner Bros. Discovery reported 103.3 million streaming subscribers in its second quarter earnings report, adding 3.6 million subscribers during the quarter. Warner Bros. CEO David Zaslav said at a Goldman Sachs conference Thursday the company expects Max to draw an increase of six million subscribers in its latest quarter, according to The Hollywood Reporter. However, Warner Bros. Discovery has also experienced turbulence over the past year. The media conglomerate—formed by the 2022 merger of Discovery with AT&T-owned Warner—is still heavily reliant on a rapidly declining cable TV business, and is at risk of losing its years-long media rights partnership between the NBA and cable network TNT. The company sued the league for not accepting its $1.8 billion proposal that it says matched an offer made by Amazon Prime Video. Warner Bros. Discovery cited the potential loss of its NBA deal as one of the reasons for a $9.1 billion write-down of its struggling TV networks earlier this month, sending shares to their lowest point of the year ($6.71).
Tangent
The agreement follows a rough quarter for Charter, which reported a loss of 393,000 TV subscribers in its second quarter, a massive uptick from the 193,000 it lost in the same period last year. Video revenue slid 7.7% year-over-year, totaling $3.9 billion in the second quarter as the company continues to face pressure from cord-cutting. Further integration of rising streaming platforms into its cable bundles could help Charter compensate for some of its losses.
Further Reading
As Linear TV Loses Revenue, WBD Takes A $ 9.1 Billion Write Down (Forbes)
Disney, Warner Bros. Discovery & Fox Combine To Offer Streaming Sports (Forbes)
