The first quarter of 2025 was a mixed bag for Hollywood earnings. The latest round, which covered January to March, saw substantial drops for both domestic box office and linear television, continuing a troubling story that will not be news to anyone following the industry.
Domestic box office gross plummeted to $1.4 billion, the lowest non-pandemic total since 1996. As for TV, some of the biggest companies saw double-digit declines in their linear TV businesses. Paramount Global saw a 36% drop in the space during the quarter.
Meanwhile, Alphabet, the parent company behind Google and YouTube, saw a 46% boost in revenue thanks to its investment in artificial intelligence. At the moment it is still unknown how the meteoric rise of AI will impact the entertainment industry, but considering that YouTube ended April with the largest share of the TV viewing audience among media companies for the third month in a row — 12.4% compared to the Walt Disney Company’s 10.7% — any success YouTube sees should concern legacy entertainment brands.
There were some glimmers of hope in Q1. With blockbuster hits like “Sinners,” “A Minecraft Movie,” and “Final Destination: Bloodlines,” the film industry seems poised to correct itself in the second quarter of the year (a record-breaking Memorial Day box office will also see to that). Additionally, all of the major streaming services owned by legacy media, save for ESPN+, saw increases in their subscriber numbers and continued to either grow streaming profits or narrow streaming losses. Similarly, some of the biggest news outlets continued to benefit from the “Trump bump” even as their smaller competitors faltered.
But all in all, the first part of 2025 continues the same worrying trend: film is in flux, linear is shrinking, streaming profitability is a mixed bag and everyone’s investing in AI.
Here are some of the biggest takeaways from the first earnings period of the year.
No impact from Trump tariffs … yet
Despite the economic uncertainty from President Donald Trump’s rapidly-evolving tariff policy, executives across media and tech assured Wall Street that they haven’t felt the pain … yet.
All of the companies in TheWrap’s earnings coverage said they were monitoring the situation, though some executives signaled that they were preparing to take steps to mitigate the impact through cost reductions, such as Warner’s chief financial officer Gunnar Wiedenfels and Paramount Global co-CEO Chris McCarthy.
The outliers who explicitly warned of a financial impact from tariffs were Sony, which said it could face $686 million hit to profit, and Apple, which said it could face $900 million in costs due to the impact of the trade policy. Apple CEO Tim Cook also said the $3 trillion company would shift to having most of the iPhones that come into the U.S. come from India, rather than China, to avoid steeper tariffs this quarter. But those plans and projections could already be upended.
While President Trump lowered the tariff on Chinese imports a few weeks after Apple’s earnings call, he recently said he wasn’t a fan of Apple’s plan to ship iPhones in from India, saying he would hit Apple with a tariff “of at least 25%” on iPhones made outside the States.
Though it wasn’t as direct as Apple, Amazon also touched on taking direct measures related to the tariffs. CEO Andy Jassy said the company’s retail business was seeing “heightened buying” in certain retail categories that may indicate stocking up in advance of any potential tariff impact. As a result, the tech giant said it would incur tariff-related costs in its second quarter related to prebuying of inventory, but that it’s “not large.”
The tariff turbulence will clearly be a topic to keep an eye on when companies report their April-June performance this summer.
A tough quarter for movie theaters
For the movie theater industry — at least in the United States — the first quarter was a rough one. Disney offerings like “Captain America: Brave New World” and “Snow White” could not carry the weight during the first part of the year while other studios did not provide a major tentpole. That caused domestic grosses to sink to $1.41 billion, the lowest non-pandemic total since 1996, and led to a $39 million quarterly loss for Cinemark and a staggering $202 million loss for AMC Entertainment.
But as AMC Entertainment CEO Adam Aron said, the first quarter was a “distorting anomaly that has already corrected itself” with hits like “Sinners,” “A Minecraft Movie,” and “Final Destination: Bloodlines” (all Warner Bros. releases) carrying second quarter grosses to a running $1.31 billion total that is on par with 2023 and nearly 69% ahead of 2024. All of that came before a record-breaking Memorial Day weekend that brought another $300 million-plus over four days.
Meanwhile, one exhibition company that dodged the pain of the first quarter was Imax, which thanks to its plans to diversify the types of films it screens worldwide was able to finish in the black with an $8.2 million profit. Give credit to the new animation box office king, “Ne Zha 2,” which grossed $164 million from Imax screens in China.
In its first quarter since splitting with Starz, Lionsgate got in the black with a $21 million profit for the first quarter, improving from a year-prior $47 million loss thanks to a rejuvenated motion picture division, robust TV production and continued high demand for its library titles. Profit for the film division rose due to lower marketing spend and solid results for films like “Den of Thieves: Pantera” and “Flight Risk,” which grossed $36 million and $29.7 million, respectively.
But the quarter wasn’t without a few speed bumps for Lionsgate, as the company announced that the film expected to be its highest grossing film this year — “Michael” — would be delayed to next year as the studio mulls splitting Antoine Fuqua’s Michael Jackson biopic into a two-parter.
As for the other studios, Warner Bros. Discovery saw a 27% decline in content revenue — the Robert Pattinson sci-fi “Mickey 17” and mob drama “Alto Knights” couldn’t hold a candle to the strong performance from the theatrical releases of “Dune: Part Two” and “Godzilla x Kong: The New Empire” in the prior year period.
Comcast saw a 13% drop in theatrical revenue, primarily from higher revenue from “Kung Fu Panda 4” and “Migration” in the prior year period, as well as the carryover benefit of “Wicked” and “Nosferatu.” Paramount saw a 3% year over year drop in theatrical revenue, despite the benefits of “Sonic the Hedgehog 3” and “Gladiator II” and the late release of “Novocaine.”
Unlike its competitors, Disney, whose theatrical results are included in its content sales, licensing and other segment, saw a 54% increase in revenue and $153 million segment profit, driven in part by the home entertainment performance of “Moana 2,” and the carryover theatrical performance from the film and “Mufasa: The Lion King.”
Linear TV keeps shrinking as streaming keeps turning the corner
The linear TV business continued to struggle in the latest round of media earnings, with Disney, WBD and Paramount all seeing their respective divisions’ profits tumble.
Both Warner Bros. Discovery and Disney saw linear profit declines in the double digits with decreases of 14% and 10%. Disney’s entertainment linear networks actually grew profits 2% to $769 million, while ESPN linear profit fell 16% to $669 million. But Paramount Global was undoubtedly hit the hardest with the company seeing a 36% drop in linear profits, with the decline in large part due to the comparison to CBS airing the Super Bowl last year.
Comcast’s media segment, which includes NBCUniversal, grew profit 21.5% to $1 billion, primarily due to lower operating expenses from lower sports programming volume and costs at Peacock compared to the prior year. The pay TV side of its business continued to bleed from cord-cutting, with video revenue falling 5% to $6.72 billion after shedding 427,000 customers.
Fox’s cable network programming division grew profits 7% to $878 million, due to higher revenues for the segment compared to the prior year period. However, its television segment profits fell to $60 million, from $145 million in the year ago period, as expenses increased due to higher sports programming and production costs driven by Super Bowl LIX and higher digital content and marketing costs.
On the flip side, legacy media’s streaming businesses continued to make progress across the board, despite being well behind industry leader Netflix. With the exception of ESPN+, all of the major streamers added subscribers during their latest quarters. Netflix, which ended 2024 with 301.6 million subscribers, stopped disclosing its quarterly subscriber counts in the first quarter of 2025 as it shifts focus to engagement.
Meanwhile, profitability in the streaming space was mixed. Disney+ and Hulu posted a combined profit of $336 million, and Warner Bros. Discovery, which includes Max, Discovery+ and traditional HBO subscriptions, posted a profit of $339 million. Both Paramount+ and Peacock narrowed their quarterly losses to $109 million and $215 million, respectively.
Big news thrives; smaller outlets fight to survive
The gap between the biggest media companies in the country and smaller outlets has never been more glaring than it is right now.
While the first quarter of 2025 was brutal for the media world from a macro standpoint — with Forbes, Scripps, HuffPost, Vox, and even the Washington Post all cutting jobs — a few major outlets are thriving.
The New York Times enjoyed a 14% jump in digital subscriptions, as well as a healthy sales increase, during the first quarter. At the same time, the Wall Street Journal rebounded from losing subscribers at the end of 2024 by adding more than 100,000 readers, and its parent company, News Corp., reported its net profit tripled from the same time a year ago.
Those outlets appeared to benefit from a “Trump bump,” as subscribers looked to see what news stemmed from the president’s return to the White House. But it appears as if that bump did not extend to most other news organizations. As a result, the divide between the few major media companies that are succeeding and those that are fighting to survive was evident this earnings season.
Tech’s bet on AI started to pay off
Earlier this year TheWrap reported that Meta, Microsoft, Amazon and Google’s parent company Alphabet planned to spend a combined $320 billion on artificial intelligence in 2025 alone. It’s a move that seems to be working.
Alphabet has previously seen boosts thanks to AI. During the fourth quarter of 2024, YouTube saw its biggest revenue quarter ever owing to a boost from the 2024 election and AI developments. But Alphabet’s real jump took place in its second quarter when the corporation saw a staggering 46% increase in profits. This was partially attributed to the expansion of AI Overviews in Google Search.
Amazon, meanwhile, saw a 17% increase in Amazon Web Services (AWS) revenue for its first quarter, with the segment now at an annual run rate of over $117 billion. The increase was fueled in part by growth in generative AI business offerings.
And Meta reiterated AI is a key focus for the social network as it pushes into the second half of the 2020s. The parent company of Facebook and Instagram reported Meta Reality Labs — its division dedicated to virtual reality, artificial reality, and AI research and integration — lost $4.21 billion between Jan. and March. That hefty figure especially stood out because it is the one sector where Meta is spending more than it is making.
But Meta chief Mark Zuckerberg is undaunted by those losses. During the company’s earnings call, Zuckerberg said Meta now plans on spending even more money on AI development than it previously projected, upping its previous projection of $60 to $65 billion to $72 billion.
As this earnings season proved, the AI arms race is only ramping up.
