Warner Bros. Discovery’s Max will add over 6 million subscribers in the third quarter of 2024, CEO David Zaslav said during an investor conference hosted by Goldman Sachs on Thursday.
While some of the subscriber growth in the third quarter will come from its new bundle partnership between Max and Disney+ and Hulu, Zaslav noted the majority will come from international markets as it continues to expand the service.
“We have a great product now, and as we go around the world, we have local content, local sports. We put that together with the biggest TV and motion picture library, and we think we have something that’s really meaningful and the market is telling us that we do,” he said. “We’re starting to scale and in the second half of the year, you’ll see real revenue growth driven by real subscriber growth and you’ll see that from here forward. It’s one of the things that makes us very comfortable and feel that we’re going to exceed $1 billion in EBITDA next year.”
The media giant’s direct-to-consumer division currently touts a total of 103.3 million subscribers after adding 3.6 million in its latest quarter. WBD is set to report its third quarter results before the market open on Nov. 7.
Max has launched in 65 international markets, but is still not present in over half of its global addressable markets, including Australia, Japan, the U.K., Germany and Italy. The company plans to continue launching in new markets over the next 18 to 24 months, with a launch in the United Kingdom slated for 2026.
“I think in a lot of the markets, we’ve underpriced and we’re still letting too many people use our product,” Zaslav added. “It was very effective for Netflix to clamp down on that, and we’ll be doing that over the next several months.”
When asked about media consolidation, Zaslav warned that there will be “much fewer players in the market” when all is said and done.
“I think there’s probably going to be only five or six players,” he predicted. “I think it’s going to be very hard … I believe it’s very hard, next to impossible, to have a sustainable growth streaming business.”
Zaslav further emphasized that the players that remain will be those with a global presence.
“There’s a reason why the FANG companies have become trillion-dollar businesses. They’re great businesses with great products, but they’re above the globe. We are now going above the globe,” he said. “So I think you’re going to see a lot of people throwing in the white flag, or saying, ‘Let’s do this differently. Let’s do this together.’ There are some players in regional markets that are saying, ‘Maybe I should be part of you,’ not just us. There are people coming to us saying, ‘Maybe we should be part of you.’ And I think you’re going to see more of that, because it makes economic sense and it makes consumer sense.”
“So there’ll be consolidation with people buying each other. There’ll be consolidation of people saying, ‘I’ve had enough’ and getting out, and I think you’re going to see a lot of consolidation in doing things like we are doing with Disney and things like that could be done in Europe too or in Latin America too or across large regions or around the world,” Zaslav added. “If it’s a better consumer experience with better economic metrics, we’re in an environment now where the content players, all of us, we want to take a hard look at it, and we want to see how we make more money, and we want to make sure we’re one of those four, five or six global players that have a seat at that final table. I think we’ve earned it as a company, because I think the best content wins. We have the highest quality content, the greatest creative team. But also because it’ll be massive shareholder value creation if we can make that journey.”
Zaslav also said Max’s international rollout will make it available in most of the world within the next two years.
“It’s as if we have the best cookie, but we haven’t been able to get it on the shelves yet. We might have the best cookie, but if you go to the grocery store and it’s not on the shelf, you can’t create the value out of it,” he said. “We’re going to be on those shelves, and I think we’re going to end — based on what we’re seeing now and how we’re growing — this six-plus million subscribers with real revenue. We’re scaling globally.”
Zaslav’s comments come after WBD shares surged over 8% during Thursday’s trading session following the announcement of an early carriage renewal deal with Charter Communications that will make Max and Discovery+ available to Spectrum TV Select customers at no extra cost.
“We really embrace [Charter CEO Chris Winfrey’s] strategy. I think it’s a brilliant strategy, but it also gets us working together again in a compelling way. A portion of the deal was that we get paid for our cable channels, so we held price on TNT, and in the aggregate, for our cable business, we got paid more money for our 30 channels. There were no channels that were dropped,” Zaslav said. “Overall, it’s a great deal for Charter, I think it’s a great deal for us, and I think it’s really good for the industry to stand up for the value that the industry has, which is a great relationship with distributors, with customers, and they’re the biggest broadband players. So we’re looking forward to doing more things with Charter, and it’s an exciting deal for us.”
