Warner Bros. Discovery adds 7.2 million DTC subscribers in 3Q 2024

Thursday, November 7th, 2024 
Warner Bros. Discovery logo

Warner Bros. Discovery Reports Third-Quarter 2024 Results

  • Global DTC subscribers[1] were 110.5 million at the end of Q3, an increase of 7.2 million subscribers vs. Q2, our largest ever quarterly growth in subscribers since the launch of Max and with subscriber growth across all regions.
  • Global DTC ARPU[2] was $7.84, a 1% ex-FX increase vs. the prior year quarter.

NEW YORK — Warner Bros. Discovery, Inc. (the “Company”) (Nasdaq: WBD) today reported financial results for the quarter ended September 30, 2024.

Direct-to-Consumer Segment – Q3 2024 Highlights

  • Total DTC subscribers[1] were 110.5 million, an increase of 7.2 million global subscribers vs. Q2.
  • DTC revenues increased 9% ex-FX to $2,634 million compared to the prior year quarter.
  • Distribution revenue increased 8% ex-FX, primarily driven by a 15% increase in subscribers, as well as higher pricing, following the launch of Max in Latin America and Europe during 1H24, partially offset by continued domestic linear wholesale subscriber declines.
  • Advertising revenue increased 51% ex-FX, primarily driven by an increase in domestic ad-lite subscribers.
  • Global DTC ARPU[2] increased 1% ex-FX to $7.84, primarily driven by domestic ad-tier subscriber growth, higher pricing, and a continuing subscriber mix shift from linear wholesale, partially offset by growth in lower ARPU international markets.
  • Content revenue decreased 11% ex-FX, primarily driven by fewer third-party licensing deals.
  • DTC operating expenses increased 1% ex-FX to $2,345 million compared to the prior year quarter.
  • Costs of revenues decreased 5% ex-FX, primarily driven by lower content expense due to the timing of releases, partially offset by the broadcast of the Olympics in Europe in the current year.
  • SG&A increased 27% ex-FX, primarily driven by higher overhead and marketing expenses to support recent launches and our content slate, including the Olympics in Europe.
  • DTC Adjusted EBITDA was $289 million, a $178 million increase in Adjusted EBITDA vs. the prior year, including a $41 million loss from the broadcast of the Olympics in Europe.

DTC Subscribers
In millions, except ARPU

                           Q3 2024  Q2 2024  Q3 2023
                           -------  -------  -------
Domestic
 Total subscribers[1]         52.6     52.4     52.6
 ARPU[2]                    $11.99   $12.08   $11.29
International
 Total subscribers[1]         57.9     50.8     43.3
 ARPU[2]                     $4.05    $3.85    $3.98
                           -------  -------  -------
Total DTC subscribers[1]     110.5    103.3     95.9
Global ARPU[2]               $7.84    $8.00    $7.88

1. Direct-to-Consumer [“DTC”] Subscriber: The Company defines a “Core DTC Subscription” as: [i] a retail subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product [defined below] for which we have recognized subscription revenue, whether directly or through a third party, from a direct-toconsumer platform; [ii] a wholesale subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue from a fixed-fee arrangement with a third party and where the individual user has activated their subscription; [iii] a wholesale subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue on a per subscriber basis; [iv] a retail or wholesale subscription to an independently-branded, regional product sold on a stand-alone basis that includes discovery+, HBO, HBO Max, Max, and/or a Premium Sports Product, for which we have recognized subscription revenue [as per [i] –[iii] above]; and [v] users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires.

The Company defines a “Premium Sports Product” as a strategically prioritized, sports-focused product sold on a stand-alone basis and made available directly to consumers.

The current “independently-branded, regional products” referred to in [iv] above consist of TVN/Player and BluTV.

Subscribers to multiple WBD DTC products [listed above] are counted as a paid subscriber for each individual WBD DTC product subscription.

We may refer to the aggregate number of Core DTC Subscriptions as “subscribers”.

The reported number of “subscribers” included herein and the definition of “DTC Subscription” as used herein excludes: [i] individuals who subscribe to DTC products, other than discovery+, HBO, HBO Max, Max, a Premium Sports Product, and independently-branded, regional products [currently consisting of TVN/ Player and BluTV], that may be offered by us or by certain joint venture partners or affiliated parties from time to time; [ii] a limited number of international discovery+ subscribers that are part of non-strategic partnerships or short-term arrangements as may be identified by the Company from time to time; [iii] domestic and international Cinemax subscribers, and international basic HBO subscribers; and [iv] users on free trials except for those users on free trial that convert to a DTC Subscription within the first seven days of the next month as noted above.

Domestic subscriber – We define a Domestic subscriber as a subscription based either in the United States of America or Canada. International subscriber – We define an International subscriber as a subscription based outside of the United States of America or Canada.

2. ARPU: The Company defines DTC Average Revenue Per User [“ARPU”] as total subscription revenue plus net advertising revenue for the period divided by the daily average number of paying subscribers for the period. Where daily values are not available, the sum of beginning of period and end of period divided by two is used.

Excluded from the ARPU calculation are: [i] Revenue and subscribers for DTC products, other than discovery+, HBO, HBO Max, Max, a Premium Sports Product, and independently-branded, regional products [currently consisting of TVN/Player and BluTV], that may be offered by us or by certain joint venture partners or affiliated parties from time to time; [ii] A limited amount of international discovery+ revenue and subscribers that are part of non-strategic partnerships or short-term arrangements as may be identified by the Company from time to time; [iii] Cinemax, Max/HBO hotel and bulk institution [i.e., subscribers billed on a bulk basis], and international basic HBO revenue and subscribers; and [iv] Users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires.

Note: Domestic includes the U.S. and Canada. Subscriber counts in the above table are rounded and minor differences in totals may exist.

More: Warner Bros. Discovery results release (pdf)

Links: Warner Bros. Discovery