Warner Bros. Discovery (WBD) has set ambitious goals for its streaming business, forecasting a doubling of profits in 2025 and a subscriber base of 150 million by 2026. This bold strategy follows the continued global expansion of Max and the company’s focus on cost efficiencies.
Despite reporting a fourth-quarter loss, WBD shares surged over 10% as investors responded positively to its streaming growth projections.
Global Expansion and Subscriber Growth
WBD ended 2024 with 116.9 million global streaming subscribers, up from 110.5 million in Q3. This includes customers on both Max and Discovery+. The company’s aggressive international rollout is expected to further boost these numbers, with Max launching in Australia in March and expanding to Germany, Italy, and the UK in 2026.
“Our global expansion still has significant runway,” WBD stated in its letter to shareholders, noting that Max is still unavailable in over 40% of the global market.
Streaming Profitability Outlook
The direct-to-consumer (DTC) segment, which includes streaming, reported an adjusted EBITDA profit of $409 million in Q4, far exceeding expectations of $289 million. Full-year 2024 streaming profits reached $677 million, a sharp increase from $103 million in 2023.
Looking ahead, WBD is aiming for $1.3 billion in streaming profits in 2025, more than double last year’s results.
CEO David Zaslav emphasized the company’s focus on profitability, stating, “Max continues to grow at a powerful pace, and we expect it to continue throughout 2025 and beyond.”
Challenges in Traditional Media
While streaming showed strong growth, WBD’s TV networks division faced challenges. Revenue from networks like CNN, Discovery Channel, and Animal Planet declined 5%, with advertising revenue plunging 17%.
Linear TV ad sales have been declining across the industry as advertisers shift spending toward digital platforms. WBD acknowledged that the U.S. advertising market has deteriorated faster than expected.
Financial Performance
WBD reported total revenue of $10.03 billion for the fourth quarter, slightly below analyst expectations of $10.19 billion. The company posted a net loss of 20 cents per share, compared to expectations of a 1-cent profit.
However, WBD’s studios division saw a 15% revenue jump, helped by increased content licensing following the resolution of the Hollywood writers’ and actors’ strikes.
Restructuring and Future Strategy
In December, WBD announced plans to separate its cable TV business from its streaming and studio divisions. This restructuring is set to be completed in Q2 2025 and could pave the way for a potential sale or spinoff of its traditional TV operations.
Zaslav described the move as positioning WBD for “broader market opportunities” as the media landscape undergoes a generational disruption.
Competition and Industry Trends
With Netflix leading the industry at 302 million subscribers and Disney+ at 124.6 million, WBD is still playing catch-up. However, analysts believe Max has a strong chance of achieving its 150 million targets.
eMarketer analyst Ross Benes noted that WBD’s crackdown on password sharing could drive further subscription growth in 2025.
Additionally, bundling strategies with other streaming platforms have been a key driver of recent subscriber gains.
Live Sports and Content Bundling
Live sports remain an expensive but crucial battleground in streaming. While Disney, Amazon, and Apple are aggressively bidding for sports rights, WBD has taken a more cautious approach.
“We like sports, but we’re very disciplined and opportunistic,” Zaslav told analysts.
Meanwhile, WBD is exploring content bundling partnerships to maximize value for consumers and reduce customer churn.
Conclusion
Despite losses in its traditional TV business, Warner Bros. Discovery is banking on streaming as its growth engine. With international expansion, cost efficiencies, and a focus on profitability, WBD believes it has a clear path to becoming a top-three global streamer.
The next two years will be critical as WBD works toward its 150 million subscriber goal and seeks to maintain momentum in an increasingly competitive market.
