Warner Bros. gains streaming subscribers on foreign push

Warner Bros. Discovery Inc., the parent of the Max streaming service, gained more subscribers than expected in the third quarter, suggesting its online business is picking up.

The New York-based media company added 7.2 million net streaming subscribers in the three months ended Sept. 30, the strongest quarterly gain since the platform’s launch, the company said in a statement Thursday. Analysts expected 6.1 million, according to data compiled by Bloomberg. Warner Bros. shares jumped 5% in premarket trading in New York.

As viewers shift from traditional TV to streaming services, Warner Bros.’ goal is to get Max on as many devices and in front of as many consumers as possible. In September, it scored an early renewal of a distribution agreement with Charter Communications Inc., the largest U.S. cable-TV service. The deal allows Charter subscribers to get the ad-supported version of Max and Discovery+ as part of their Spectrum TV select packages.

“The Penguin,” released during the quarter, was one of the biggest premieres on Max and garnered audiences similar to “The Last of Us” and “House of the Dragon,” the company said.

Warner Bros. launched Max in Europe in May, adding to existing offerings in Latin America. The company has plans to introduce Max in Asia, including Indonesia, Malaysia, the Philippines and other countries later this month.

Revenue at Warner Bros.’ direct-to-consumer unit, which includes streaming services, rose 8% to $2.6 billion. At Warner Bros.’ traditional networks segment, its biggest business unit that includes the CNN and TBS cable channels, sales rose 3% to $5.01 billion.

The gains in streaming were offset by lower revenue at Warner Bros.’ studio unit, where movies like “Beetlejuice Beetlejuice” and “Twisters” couldn’t compete with the outsized success of “Barbie” last year. Revenue in the studio unit fell 17% to $2.68 billion in the third quarter.

Gaming revenue also declined, dropping 31% excluding foreign exchange from a year earlier, showing that the business is still struggling. In the first quarter, Warner Bros. released “Suicide Squad: Kill the Justice League,” which critics called one of the biggest gaming flops of the year.

Overall sales at Warner Bros. declined for the fourth consecutive quarter to $9.6 billion, missing the $9.81-billion average of analysts’ estimates. Warner Bros. reported a profit of 5 cents a share after a loss of 17 cents a share a year earlier.

Miller writes for Bloomberg.