Warner Bros. Discovery, Disney announce new streaming bundle

Shares of Warner Bros. Discovery (WBD) are trading lower after the company reported first quarter earnings and revenue that missed Wall Street expectations. Yahoo Finance's Alexandra Canal joins Morning Brief to break down the company's earnings and its latest move in streaming game.

The entertainment giant announced during its earnings call that it will roll out a new streaming bundle this summer with Disney (DIS), which will include Max, Disney+, and Hulu. The move is the company's latest effort to drive incremental subscriber growth and increase retention as streaming bundles have gained more traction in the last year.

The price of the joint streaming bundle has yet to be announced, however, the company said it will be based on the current price of Max, which is among the more expensive services on the market.

The announcement came as Warner Bros. Discovery saw streaming momentum in its fourth quarter, with Max topping Street estimates by adding 2 million subscribers. As its linear networks continue to struggle, the company is looking for more opportunities in the streaming space to drive up overall revenue.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video transcript

Let's talk about another stock that is trending here this morning.Warner Brothers Discovery shares.They are falling after reporting earnings and revenue that missed expectations in the first quarter.They did, though, see growth in their streaming business.This comes after announcing a new bundle with Disney, which will offer their streaming services Disney plus Hulu and Max at a price that's yet to be disclosed.Yahoo Finance's Alexandra Canal has the details on that for us.Ali Hi, Johnny.Yeah, the bundle was talked about quite a bit on the earnings call, which just wrapped up management saying there clear business benefits to this.That includes driving incremental subscriber growth.And since consumers will have to retain all three of those services, Disney Plus WHO and Max WBD said it expects the product will increase retention and lower churn and help support lifetime value of the consumer in addition to increasing marketing efficiencies.And this comes as we seen bundles gain more and more traction over the past year or so as media giants really attempt to not only were subscribers to their service but retain those subs.The bundle will go live this summer, as you mentioned we do not know a price yet, but management did say on the call that it will be based on the current price of Max Max, one of the more expensive streaming services on the market, with the A supported here costing 999 and the lowest priced a free version coming in at 1599.But this announcement does come as we saw streaming momentum in the quarter.The max streaming service adding 2 million subscribers ahead of estimates that direct to consumer division also profitable management, saying that it expects to remain profitable throughout 2024.But of course, not all positive moments in this report we saw me on the top and bottom lines.Linear networks continue to struggle, network advertising tumbling 11% year over year in the quarter.You know, it's really interesting, And I keep I keep thinking back to one of the stats that jumped out from that Deloitte Digital Media Trend survey that you and I have talked about that we've discussed here at lanes, with 36 percent of Americans believing they're not getting the bang for their buck on SVOD streaming video on demand here.So how are.How is bundling?How is making sure that they're even going after specific titles or rights to broadcast certain sports?Even How is that going to change the value proposition for a lot of these companies here?Well, it gives consumers more choice.And at the end of the day, the idea that you have more choice as a consumer that's going to be a net benefit moving forward.Also, when you think about content sports in particular, the stickiness of content is important.You want to have people continuously coming back.Sports is one piece of content that you can't necessarily watch later.It's something that's on demand viewing.You need to watch at that time.Which is why the NBA rights are so important for a company like Warner Brothers Discovery.They did mention that on the call.He wouldn't elaborate where talks currently stand today.But CEO David as I said that he's hopeful they will find a that is fair for both sides and that they have the ability to match.Third Party offers a Wall Street Journal reporting that NBC Universal is giving Warner Brothers Discovery a run for their money literally when it comes to these NBA, right, so we'll see where that develops.More sports documentaries.I mean, it's a big time winning time all over again here in New York City right now with the Pacers versus the Knicks.Of course, the Knicks are up right now in that series, anyway, that neither here nor there, but about that, you know, somebody's got to be and it's me.