Late on the bandwagon

It would be a considerable exaggeration to say that everything has sailed along smoothly in the year since Discovery closed its acquisition of WarnerMedia assets from AT&T.

It was never going to be easy to merge two apparently disparate operations into one coherent whole, especially given an economic downturn, an advertising slump and the pivotal move away from linear television networks into streaming. In October the company announced $4.3bn in restructuring charges, largely relating to content impairments and development write-offs.

WBD rattled Hollywood by killing off the completed Batgirl movie on which it had spent $90m, thousands of jobs were lost across the company and CNN’s new streaming service was scrapped just after it launched.

Now the company has announced a loss of $1.1bn for the first quarter, dragged down by weakness in its cable TV business.

On the bright side, the company said it expected its streaming service to be profitable in 2023, a year ahead of schedule, but it remains a hugely competitive market, and investors have been questioning the business model.

WBD has been trying to calm down the spending after a time when all the streaming channels were hurling money about with abandon. Given that its CEO, David Zaslav, was ranked in 2021 as the most overpaid CEO in the US, there are clearly places to start. Much will depend on the relaunch of its streaming service, which will combine HBO Max with Discovery Plus. The big question is how well this offering will go down with consumers who are already enjoying a plethora of other options.