By Jennifer Maas
TV Business Writer
Warner Bros. Discovery saw streaming subscriptions rise to nearly 95 million combined global customers across HBO, HBO Max and Discovery+ from July 1-Sept. 30, the quarter during which the highly anticipated “Game of Thrones” prequel “House of the Dragon” took flight.
As the David Zaslav-led company works toward unifying the streaming platforms into one service, following its April acquisition of WarnerMedia, Warner Bros. Discovery again decided not to break out HBO and HBO Max subscribers in its quarterly earnings results. Instead, WBD revealed the new overall total along with its Q3 report Thursday.
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On the earnings call, Zaslav said the company had moved up its target date for the launch of the merged HBO Max-Discovery+ streaming platform to spring 2023 in the U.S., from the previous timeline of next summer. “While our team is hard at work preparing for the launch of our combined offering, we’re also actively experimenting and testing our hypotheses about the future product, in large part to address some of the deficiencies of the existing platform,” Zaslav said.
While definitely getting closer to 100 million, the Q3 subscriber growth wasn’t substantial, increasing only 2.8 million worldwide accounts across WBD services over the second quarter. Domestically, HBO, HBO Max and Discovery+ added just 500,000 customers.
For reference, Netflix — which has been the target of much subscriber growth criticism this year — added 2.41 million net new paid subscribers in Q3, including a gain of 100,000 in the U.S./Canada region, to stand at 223.1 million worldwide as of the end of September.
The owner of HBO, Discovery Channel and the Warner Bros. studio reported Thursday a net loss of $2.3 billion in Q3, which included $1.92 billion of pre-tax amortization from acquisition-related intangible assets and $1.52 billion tied to pre-tax restructuring and other charges.
In a statement, the company’s top officer acknowledged a challenging operating environment. “We are reimagining and transforming the organization for the future while driving synergy enterprise-wide, increasing our target to at least $3.5 billion, and making significant progress on our combined DTC product,” said Zaslav, Warner Bros. Discovery’s CEO. “While we have lots more work to do, and there are some difficult decisions still to be made, we have total conviction in the opportunity ahead.”
In Q2, WBD said HBO Max, HBO and Discovery+ subscribers overall totaled 92.1 million, up 1.7 million from 90.4 million the prior quarter. That’s up 22%, from 75.8 million, on a pro-forma basis versus a year earlier. However, WBD’s streaming businesses lost subscribers domestically in Q2, dropping 300,000 — falling from 53.3 million in the first quarter to 53.0 million as of June 30 in the U.S. and Canada.
At the close of Q2, the company restated HBO Max subscribers to count third-party distribution deals only if the individual user has activated their subscription. Under prior owner AT&T, WarnerMedia counted wireless customers on plans that bundled HBO Max as HBO Max subscribers, even if those users didn’t use the service. In addition, WBD excluded “legacy Discovery non-core subscribers” from its total streaming subscriber count.
So while for Q1 AT&T had reported 76.8 million total HBO and HBO Max subscribers worldwide, including 48.6 million domestically, and Discovery reported 24 million direct-to-consumer subscribers in Q1, which would add up to 100.8 million — WBD has adjusted the first-quarter pro-forma total based on the stipulations listed above to 90.4 million.
Currently, HBO Max is available for $14.99/month without ads and $9.99/month with ads in the U.S. Discovery+ is priced at $6.99/month without ads and $4.99/month with ads.
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