Quiver Quantitative - Warner Bros Discovery (WBD) is reportedly planning additional cost-cutting measures and a subscription fee increase for its Max streaming platform, according to sources familiar with the matter cited by Bloomberg News. This move comes after the media giant has already slashed more than 2,000 positions in the past year. The new cost-cutting measures may include further layoffs and reductions in marketing and technology budgets, potentially saving the company hundreds of millions of dollars.
The company also intends to raise subscription fees for its streaming services Max and Discovery+ to reach $1 billion in earnings by next year. Max's ad-supported plan currently starts at $9.99 per month for U.S. subscribers. These actions align with Warner Bros Discovery's strategy to reduce its debt burden and boost cash flow following the challenges presented by last year's Hollywood strikes and a sluggish advertising market.
Market Overview: -Warner Bros. Discovery considers further cost-cutting measures and price increases for its Max streaming service.
Key Points: -The company seeks additional savings after eliminating 2,000 positions in the past year. -The streaming division, including Max and Discovery+, could face budget cuts, primarily in marketing and technology. -A price hike for Max aims to generate $1 billion in streaming earnings alongside Discovery+ next year.
Looking Ahead: -Warner Bros. Discovery prioritizes reducing debt and improving cash flow amidst a challenging advertising market. -Potential layoffs and streaming price increases may raise concerns for employee morale and subscriber retention. -The success of the cost-reduction strategy hinges on balancing financial goals with content quality and user experience.
Warner Bros Discovery ended 2023 with $4.3 billion in cash and $44.2 billion in gross debt. The company has been focusing on streamlining operations and improving profitability amidst a rapidly evolving media landscape. With increased subscription fees and strategic cost reductions, Warner Bros Discovery aims to strengthen its position in the competitive streaming market.
While the company hasn't publicly commented on the planned changes, the report indicates that it remains committed to maximizing efficiencies and delivering enhanced value to its subscribers and shareholders.
This article was originally published on Quiver Quantitative