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David Zaslav

Good morning, everyone, and thank you for joining us. 2.5 years ago, when we brought Warner Bros. Discovery together, our vision was to combine Discovery's leading position as a global force in media and entertainment, with local content and local sports, alongside the iconic storytelling brands, IP and libraries of Warner Bros. and HBO. This powerful combination is a unique, compelling offering that we believe would resonate with consumers worldwide.
It was the strategic guts of our transaction. Our direct-to-consumer business ended 2024, with about 117 million subscribers across more than 70 countries, and we still have nearly half the world to go, with many key markets, like the UK, Italy, Germany and Australia, launching over the next few years.
We added about 6.5 million subscribers in the fourth quarter, and nearly 20 million subscribers in less than a year. Max continues to grow at a powerful pace, and we expect it to continue throughout 2025 and beyond.
In this generational media disruption, only the global streamers will survive and prosper, and Max is just that. With the launch of Max internationally in 2024, we now have a global subscription business that is growing subs, revenue and EBITDA. We have a clear demonstrable path to at least 150 million subscribers by the end of 2026, fueling further revenue and EBITDA growth.
Max is one of the world's very few global and profitable streaming services. Our direct-to-consumer business contributed almost $700 million in EBITDA, a $3 billion improvement in just two years, and we expect direct-to-consumer EBITDA to nearly double in 2025.
As I mentioned in our last earnings call, we are laser focused on getting our Studios back to a place of industry leadership, and generating $3 billion or more in EBITDA. We are showing growth and real strength in our Warner Bros. television business, which I believe is the highest quality and largest maker of TV content in the world.
We are excited about our Studios' creative and financial outlook this year and beyond, particularly all that's coming from Warner Bros. Pictures and DC Studios, kicking off with the release of Superman this July.
Despite the headwinds facing linear television, we recently struck a flurry of multiyear renewal agreements with five of the six largest ATV providers in America, many of which were a year early, and all of which commanded overall rate increases. These long term deals provide real security and stability to our linear business.
Finally, we have been hard at work and have made real progress implementing the reorganization we announced in December, which went into effect on January 1. This new structure will provide investors with better visibility to the strength of our streaming and Studios business, and will give us real strategic value and optionality into the future.
2024 marked a year of significant progress in transforming Warner Bros. Discovery, laying the foundation for what's next, and positioning us as a global media leader committed to providing shareholders with sustainable future growth. We remain fully focused on enhancing shareholder value and welcome your questions.

Question and Answer Session

Operator

(Operator Instructions) Jessica Reif Ehrlich, Bank of Securities.

Jessica Reif Ehrlich

Thank you. Good morning, everybody. Two questions, please. Can you give us an update -- David, you just alluded to the restructuring taking place as of January 1. Can you talk about potential longer term more transformative actions?
And then secondly, in the shareholder letter, there was a comment on near term linear pressure as you add direct-to-consumer and greater packaging flexibility. Can you flush that out? And maybe discuss the along -- in '25, will there be consolidated growth?

Gunnar Wiedenfels

Morning Jessica. This is Gunnar. Let me take those two. Starting with the corporate restructuring, so this, as you know, has been a real priority for us, and we've made great progress. As we said in the letter, we have implemented that new structure effective January 1.
As you would imagine, there's still a lot of contract work underway. To manage and implement the financial aspects of the reorganization, we would still have processes run out of the wrong entities, tax implications, et cetera. So we're still working through that with a lot of focus, and we're making great progress. And as I said -- as we said in the letter, we're hoping to wrap that up really within the next few weeks.
The point I want to --

David Zaslav

So I would just add that I think this restructure creates real visibility to the strength of our Studio and library and global streaming business. It allows us to -- we'll be better able to respond to this generational disruption.
The new structure will enhance our strategic flexibility and also create potential opportunities to unlock additional shareholder value, which we're focused on. And we're also focused on executing our strategy while ensuring we're able to take advantage of broader opportunities as they arise. In this disruption, we expect that there will be.

Gunnar Wiedenfels

Great. Yeah. Last thing I was going to add, Jessica, is we don't think, from today's perspective, that we're going to see a dramatic change to our segment reporting. But we are planning to provide incremental guidance beyond that to create more clarity on the global linear networks on the one side and then streaming and Studios. Think of it as sort of a sub consolidation and -- based on the progress we're making, I'm hopeful that we'll be able to provide that as we report first quarter earnings.
And then on the -- to your point about linear pressure packaging flexibility, look, I think I want to take a step back. The work that our affiliate team has done in 2024 is just absolutely unbelievable. Working through all these agreements ahead of schedule and securing rate growth in the current environment, I think is a remarkable accomplishment.

David Zaslav

And it takes us -- it gives us a different cadence, having started in the distribution side of the business. Normally, you would have your deals coming up 20% a year. So you're always facing that on that either opportunity or uncertainty.
In my -- in all of my experience, we've never had this secure of a base, where virtually -- where almost all of our deals are done with increases, with all of our channels carried, for a period of years that gives us I think a real advantage as we go in -- it takes one issue off the table for us.

Gunnar Wiedenfels

And as we look forward, the one thing I would want to call out, we've seen pretty strong rate increases in the prior year. I mean, in Q4, close to 6% rate increases in our domestic affiliate business. With the new set of deals, those rate increases are going to be slightly slower or more in the low single digit versus mid-single-digit rate. But as we laid out, we have also, as an industry, I think come together and created some flexibility that will drive the sustainability and longevity of that ecosystem.
And then specifically when we look at the international part of our business, it's really remarkable how across our international footprint in the aggregate, we are already seeing positive net revenue impact from our affiliate renewals.
What does that mean? In many of these renewals, we're working together with our affiliate partners to make some concessions on the linear side, where they're facing not as pronounced, but similar pressures as domestically here. But we're cooperating through software hard bundles on the B2C side. And net-net in the aggregate, we're growing.
Across our international affiliate portfolio, we're up in revenues. That's the kind of crossing of the lines that we're looking for. We're not there in the US yet, but it's a great proof point that we're seeing that strong value and demand for our content internationally, already leading to consolidated growth.

Jessica Reif Ehrlich

Thank you.

Andrew Slabin

Okay, let's move to the next question.

Operator

Robert Fishman, MoffettNathanson.

Robert Fishman

Hi, good morning. Two for you guys. As you think about the importance of scale in DTC, curious, does Max have enough diversity in programming as a standalone service to compete with those larger SVoD platforms? Or maybe asking it differently, any updated thoughts on whether the smaller streaming platform ultimately need to consolidate?
And then on a related note, when you think about the strategy to use sports and news on Max, pulling that content from the ad tier, I think, yesterday. Can you talk more about how you plan to explore ways to evolve the sports and news distribution ecosystem? Thank you.

David Zaslav

Thanks, Robert. We really see our offering is unique, and there are very few global streaming services and the kind of demand and consumption that we're seeing around the world is quite compelling, and it's really driven by the quality of the original storytelling, whether it's White Lotus, House of the Dragons, The Pit, together with the great library of content that we have and the great IP and motion pictures.
But you add that to the fact that we have 20, 25 years of entertainment content from our free-to-air channels, cable channels around the world and sports. It's really the quality package of content you really want to see, which includes even things like Friends and Big Bang Theory.
It's got a great menu. It's distinguished from others because, in addition to that very high quality, you also have meaningful local. And so -- and that is also driving not only consumer interest, but distributors' interest in the product. So we feel really good about where we are.
JB, talk a little bit about our news and sports strategy because it differs in the US versus other markets.

Jean-Briac Perrette

Yeah. Robert, I think both on the diversity point also, we've never gone into a period, as we look out the next two years and frankly, well into 2027 at this point, where we feel better about the lineup, the consistency, the strength.
So in our note, we have 15 franchises returning, they've have been in our top 20 at times. So we feel really good about the content lineup coming and the diversity of that content lineup over the next two plus years. On the sports and news front, we recognize and we've said, I think, fairly openly.
We're continuing to experiment on what the right model is. And the reality is we have a variety of different models in operation around the world. In the US, as you rightly point out, we announced yesterday we're moving sports and news out of the ad-lite and into the premium and standard ad free. In Latin America, we have it across all of our packages. In Europe, we upsell it as an add-on and a buy through.
And so we're openly continuing to experiment as to what the right model is and what the best way is to both drive engagement and first user acquisition through that powerful content. But at the same time, make sure we're figuring out a business model that works. And we continue to experiment and see what works. And we have the beauty of a global footprint with rights across the world that we can experiment with.

David Zaslav

And one of the things that we've pivoted on is Mark Thompson and Alex MacCallum, who -- the two of them built the digital business at the New York Times, we see that as an opportunity to build a completely separate digital and subscription line of businesses.
And over the next few months, they'll be out talking to you about how they're taking advantage of CNN as the largest digital news brand in the world, the most trusted news brand in the world, with over 150 million people coming every month, and how they're going -- and what we're doing to build a sustainable digital business out of that.
But when you look at the overall question of what are we, we said three years ago, it's not how much, it's how good. And that has been our focus. So in Europe, when we have sport, we have the best support. And we're going out with the highest quality content. And so that is Casey and Channing and Mike and Pam, the focus is -- and Gun, it's not how much, it's how good for this streaming service.

Andrew Slabin

Okay, let's move to the next question, please.

Operator

Kannan Venkateshwar, Barclays.

Kannan Venkateshwar

Thank you. Maybe a couple. First one on strategy. And David, if you could just outline how you see the asset landscape right now. Obviously, there's a lot going on in the industry with different objectives. But in this environment, do you see yourself as a buyer or a seller?
I mean is there an opportunity to maybe become the consolidator and do some kind of a bigger spin-off of networks? So your thoughts on that would be useful.
And I'm going to just to follow-up on Jessica's question on the full year. When you have easier comps on Studios this year, and if you just look at Networks, despite the headwinds, you just take the same trend line as this year into next year, and then DTC profitability that you guided to, it would imply that you should grow EBITDA in '25. So is there something that takes away from that algorithm? It would be great to get your thoughts on that. Thanks.

David Zaslav

I guess, fundamentally, when you look at the marketplace, we really believe that the global players will be those that will really prosper in the years ahead. And ultimately, the largest sustainable growth media companies, they'll probably be four or five or six.
And our job every day is to fight to get a seat at that table. And we feel that we've made real progress now in -- with our global streaming service and the global appeal of all of our content and the consumer reaction to assure that seat.
The consequence of that, I think, is there's more and more pressure on regional players. Can they build their own platform? Do they have enough local content? One of the things that we're seeing now is we've been talking about bundling for 2.5 years.
But many of the really high quality local players have come to us now after 2 or 2.5 years and aligned on this -- on our strategy of Better Together. So whether it's Globo in Brazil or Televisa in Mexico or all across Europe, players coming to us. And I expect that that's going to happen.
There'll be a few global players. There may be some consolidation in getting there. The consolidation may simply come with bundles. And the bundles, as opposed to just being an economic bundle, will be a consumer friendly bundle where you can move between content from one to another. And I think we're going to be a very, very attractive player.
We're already having a number of discussions, and we'll just have to assess how strong we are alone and who -- and when we need. In the end, we'll always do what's right. We're a public company. We're always going to do what's right for shareholders. But JB, this idea of bundling because we're -- this is something we're attacking regularly.

Jean-Briac Perrette

Yeah. I mean I think, at the end, as David said, there are two forms of aggregation. There's a structural one, which is what David talked about. And then there's a commercial one, which is the bundling strategy. And we've seen great success with it, obviously, here in the US with Disney, seeing it both drive acquisition as well as significantly reduced churn.
And to the earlier question that Robert had about diversity. The reality is the industry has gone from a model in the 2010 to 2020 period of everybody trying to do everything, and frankly a lot of content and an overspend to a much more rational spend where we've gotten all back to doing what we're really good at and providing consumers access to all that goodness through these bundles.
And so I think that is a commercial path to getting a lot of the value, and we're seeing it happen already. And as David said, the good news is people are seeing that and it's gaining a bit of momentum across the world, not just with global players, but frankly with the regional and local players as well. And so we think that's an exciting new growth vector for us as well.

David Zaslav

And sports will be a pressure point. Some regional players are becoming more and more dependent on sports and rental sports. And the ability to really build a long term platform on short term sport rights has not been a good story in the past, and it's unlikely to be a good story in the future.

Gunnar Wiedenfels

Okay. And then, Kannan, on your financial follow-up. Look, as you saw in the letter, we're not intending to give consolidated financial guidance this year, as we did in the prior year as well. But we have a lot and I'll just recap some of the points that we put in there and give some real context.
So starting with B2C, you saw the $1.3 billion EBITDA target. Very achievable from our perspective. And importantly, having gone through a $3 billion swing over 2.5 years here in profitability, I do think we have now earned the flexibility here to make trade-off decisions, get behind what's really working, fuel further growth or optimize for profitability where we don't see those opportunities. So I think that's a pretty specific guidance that you can model.
On the Studios side, you're right, we do have a lower comp in 2024. We talked about the limited avails for content licensing in the prior year. That's obviously getting better. We have a hunting TV production business, which we expect to continue growing and improving in profitability. Channing's team is already doing a phenomenal job.
And then JB, you may have seen the restructuring of the games unit that JB has implemented towards the end of last year. So with that, we should be in a much better position in 2025 as well. And then I also believe that our film slate has a greater balance.
And as we've discussed multiple times, we should be -- with the process rigor we have implemented, we should be doing better financially, both in success and the inevitable misses that you have to expect with a hit driven business as well. So in the nutshell, Studios, certainly very significantly better than EBITDA this year than in the prior year.
And then the third point, obviously, is the Network business. And I don't want to create the wrong impression here. That business continues to face challenges. We have seen a weaker ad sales result in Q4 than what we had hoped for and what we had expected, frankly. We didn't make a ton of political advertising. But CNN, we had hoped for a greater benefit from the elections, which didn't come in.
Now going into the first quarter, we see some mild positive signals from the ad market. It's not a sea change, but we're seeing less upfront cancellations in the prior year. We're seeing scatter CPMs up moderately. But we also acknowledge that we have some work to do in terms of our linear portfolio ratings and delivery.
Channing has taken over that business as an additional responsibility, has put the team in place. There are a lot of content initiatives that are underway. Some new shows bailing out loud of the TLC, the team that's delivered so many hits in the past is doing very well.
And then the thing that I'm most excited about is that Channing, with her vast knowledge of the deep library at Warner Bros. and HBO, is going to implement a strategy of much more efficiently utilizing those libraries. That's always been one of the core ideas from a synergy perspective here. So hopefully, we'll be seeing some progress there as well.
So -- and then I called out on the affiliate side, the fact that we're going to -- we're expecting to continue to see sub declines. It's quite too early to expect a leveling off or a significant moderation, slightly lower rate increases than in the past.
We do have a great sports portfolio. And again, I'm very, very happy with how that sports strategy has been implemented over the past few years. And -- but that does mean that we're seeing some incremental expense in 2025.
Importantly, expense that will come back out in 2026. Because remember, we have a half a season of the NBA this year, and that was a significant chunk of expense, and 2025 is only suffering a little bit on the expense side from having that expense plus the cost of the new rights. So we'll see a very significant improvement as we come out of the year into 2026.
Other than that, we will continue to be very, very focused on cost. It continues to be a huge priority for the team, albeit, obviously, now from a basis of a cost structure that's already been improved very significantly over the past few years.
And then last comment I'll make is on the International side. We continue to see trends in the linear market that are much better than domestically. Not in the aggregate growing, but a much more moderate pressure there, even though in the current geopolitical environment, we have to acknowledge that there's some uncertainty there as well.
So that's the reason why we're not out here with a firm hard number for that business or the company in the aggregate. But look, we're making phenomenal progress in the transformation of our business and the engine here is obviously to have those lines crossed. And we see so much opportunity in DTC and the Studio businesses, and we have no doubt that we're going to cross the lines at some point by putting a timestamp on it.

Kannan Venkateshwar

Thank you.

Operator

Kutgun Maral, Evercore ISI.

Kutgun Maral

Good morning and thanks for taking the question. I want to ask about free cash flow and the balance sheet. Gunnar, I know you just mentioned that you're not providing explicit consolidated guidance and walk through the moving pieces and the uncertainty ahead.
So forgive me for the follow-up, but any chance you could expand on the free cash flow outlook for the year, particularly with the moving pieces across working capital?
And I ask in part to get a better sense of where net leverage can move to from 3.8 times today, because it seems like we could see a healthy year of deleveraging ahead, but I can't really tell with the EBITDA commentary. So I would appreciate your perspective. Thank you.

Gunnar Wiedenfels

Sure. Look, Kutgun as you know, free cash flow has been one of our priorities from a financial perspective, the most important metrics. And we have really changed the entire company's mentality. This was -- this is not a fact anyone looked at three years ago, and we have a pretty well-oiled machine now. And that's one of the reasons why we continue to put up these strong cash conversion rates even with some top line pressures, especially on the linear side.
The balance sheet, I think is in very good shape now. By the end of this quarter, we will have paid down $19 billion of debt since closing the transaction. And we will continue to be super, super focused on this. At the same time, I also want to reiterate, I'm not worried about any maturities. I view our capital structure as a real asset. The terms that we locked in between the rates and the maturity profile are an absolute strategic asset for this company.
So we'll continue to focus on bringing that debt down further. I continue to believe that 2.5 to 3 times is the right leverage target for this company. But it's not the be all end all, I think, that is the target of this company. And specifically for free cash flow in 2025, again, we're going to continue to focus on it.
Talking through some individual building blocks, we want to continue growing content investments, albeit with continued improvement of our ROI against those investments, and I see evidence of that every day, moving further through the free cash flow walk.
Working capital was -- will be strong again in 2025. We did have a good result in though there was a drag of almost $500 million from paying down some of our securities facility opportunistically, which I don't expect to happen in 2025.
We will obviously benefit from lower debt load and corresponding interest payments. We are going to see a little more CapEx as we expand our production footprint, predominantly in (inaudible) expanding our capacity there. And restructuring expenses are going to continue to come down. But to your point, the absolute dollar amount in the end is going to be mostly driven by the resulting final EBITDA number, of course.

Kutgun Maral

Very helpful, thanks Gunnar.

Andrew Slabin

Next question.

Operator

Rich Greenfield, LightShed.

Rich Greenfield

Thanks for taking the questions. I've got a few, but hopefully, they're quick. Given your comments about sports stuff that penalized '25 until the NBA ends after the first half, how should we think about the net sports cost savings for '26 versus '25?
Disney is also -- this sort of goes to JB's commentary. Disney is dropping a whole bunch of sports. You're probably going to have half the UFC available, all of F1. and Sunday Night Baseball is being now available.
But it doesn't -- given you're renting sport comments, should investors assume that you don't have interest in any of those sports rights at the moment?
And then just finally to follow up on the earlier question on your new affiliate deals. Do you get any type of minimum penetration guarantees for Max when you included as a wholesale as part of these packages? I know you used to get minimum penetration for your cable networks, I'm curious how that works for DTC.

David Zaslav

Thanks, Rich. Look, we like sports, but we're very disciplined and we're opportunistic. So we're money good on almost all of our sports in this company. And we've worked very hard to build our free cash flow, our EBIT, to pay down debt.
And I think the critical element for us, as we look at our streaming service, is the quality content, the movies the series that Channing and Casey does, that's the leading -- that's the leading edge of what consumers -- and our library. That's the leading edge of the value equation.
And we own that. So when we launch Harry Potter in a year or a little over a year, we'll have 10 consecutive years of Harry Potter and be able to amortize that globally around the world. That kind of investment also pays off in merchandising, in our smaller theme oriented parks.
And so our focus is let's really spend economics on where we can get the best return. So there are sports rights that are -- that we can look at opportunistically and say we can make a real return of. But we are -- we don't need any more sports anywhere in the world in order to support our business.
We would buy sports in order to -- if we think it would enhance our business. And it's been more difficult. Some of those prices being paid, and some of the competitors are opting to go to sports instead of doing what we do, because what we do is long cycle, it's hard and it's not easy to do what Channing and Casey and Mike and Pam and James does.
So when I see a real push to pay a lot more for sports to get effective -- guaranteed audiences or an audience that you could really model versus building on great IP, like Batman or the Penguin or -- I think that's a good thing for us because that's where we're going to really build the value and that's what we build our brand around.

Jean-Briac Perrette

And then, Rich, on the penetration and carriage commitment question, a couple of things. One is it's not a one size fits all. And globally, we have a variety of different models in play. The second is, obviously, we're doing soft and hard bundles.
In the soft bundles, obviously, there's no penetration or carriage commitments. In the hard bundles, there's plenty that do have carriage for penetration commitments. And then there's others that don't. So it's really kind of a mixed bag.
It's hard to say it's one particular model, but we certainly do -- in a variety of cases, do have obligations and commitments, and that's part of what we obviously -- the reasons we pursue them is that we do have carriage commitments like we've done in UK with Sky, like we've done in other markets across the world, where the partners agreeing to distribute it to a fixed number of their subscriber base.

Rich Greenfield

How much is (multiple speakers)

Gunnar Wiedenfels

I'll just add one last thing on the sports side to be specific. We will see several hundred millions of dollars of sports expense come out in 2026. To be fair, there will be some associated ad revenues as well, but this should be a sort of certainly a few hundred million dollar improvement in 2026 over '25.

Rich Greenfield

Thank you.

Operator

Mike Ng, Goldman Sachs.

Mike Ng

Hey, good morning. Thank you for the question. I just have two related to DTC. It's encouraging to hear about the 150 million plus subscriber target by the end of 2026. Of that, roughly 35 million subscriber growth over the next two years.
Any thoughts on how much is domestic versus international? It sounds like the comments around the international launches and the hard bundles, it seems like it's more international, but just wanted to get your thoughts around that.
And the related ARPU pressures because of these growth drivers, is that more of a comment around ARPU potentially being flattish from here? Or could we actually see ARPU down a little bit before normalizing and returning to growth? Thank you.

David Zaslav

Look, the US is a pretty mature market. We think that there's still some growth given the quality of our service. And we're fighting for that. A lot of the growth may come from price as we play around with the quality of what we're providing versus the cost of what we're providing, as well as how many people at home can use the service, and that will be rolling out.
But this idea of a global media company and a global streamer and being able to scale, that is -- that's the point that we're pushing on right now on an open door. And that's where we think, when we look around, there's not a lot of players play in that game. So JB?

Jean-Briac Perrette

Yeah, I mean, I think, Mike, a large proportion of the growth will come from international, just because, again, as David mentioned, we've got a material footprint outside the US that we're not even reaching yet. And so that international growth will come from launching in new markets as well as penetration growth. So that's the answer on the first question.
On the ARPU question, you will see some deterioration in the ARPU in the near term. But again, it's -- at this point of our expansion particularly given that you think about things like our ad-lite offering prior to about 15 months ago was only available in one market. It's now available in over 45 markets. That's taking time as we go with a lower priced ARPU or price in some of these markets and build up the advertising revenue stream, that will take some time.
As we launch in international markets in Asia, which is a region that has generally lower ARPUs, you'll see some, obviously, continued pressure that comes from that. And then as we do recognize that trying to get the product in the hands of more people more quickly is a priority as we do these attractive hard bundled deals, but where we do give up a little bit more on pricing to get immediate scale and distribution, that will as well.
So you will see that pressure go on. But we'll continue to manage the business smartly in terms of looking at our subscriber acquisition costs and balancing that with the right LTV profile. And we think there's a lot of room still to lean into that equation based on the numbers we're seeing. So -- and medium to long term, we're very confident we can get back to ARPU growth even after this expansion period here over the next sort of 12 to 18 months.

Mike Ng

Great. Thanks David. Thanks JB.

Operator

Ben Swinburne, Morgan Stanley.

Ben Swinburne

Thanks. Good morning and thanks for the shareholder letter. I think it's helpful. There's three sort of long term kind of -- I guess, you wouldn't call them guidance, but long term goals that you guys have talked about either in the letter or this morning, one for each segment.
I was hoping you could talk a little bit more about it. In networks, there's a comment that you think you can stabilize segment revenues over the next few years following the MVPD agreements? That would be certainly exceeding the market's expectations. I'd love to hear a little more about that outlook.
The 20% margin to DTC, any time line that you'd want to share with us at this point? I think you'll be probably around 10% plus for '25. And then, David, the $3 billion plus of Studios EBITDA, I think last year was tough. But even in the prior year, you were kind of in the mid low 2s.
So how can you help us gain confidence across those three metrics, all of which I think would be -- would drive healthy value for your stock and upside to expectations. Thanks a lot.

Gunnar Wiedenfels

Yeah. Okay, Ben, thank you. Let me take them one by one. On the network side, I want to make sure the comments are understood properly. We're not expecting sort of revenue stability as in sort of zero growth or decline, right?
What we're talking about is stabilizing our position within the industry trends. And certainly, we do hope that some of the movement that we've now seen in recent affiliate renewals over time will have a positive impact on the industry overall. But don't take this as sort of guiding to flat revenue from linear. But I do think our hand today, much better than it was maybe six to nine months ago.
On the DTC side, the 20% margin target, it's one of those that we're going to manage. I have no doubt we're going to be able to hit and exceed those margins, but we're not going to be managing towards a margin goal. It would be wrong. As JB laid out, we're looking at lifetime value relative to SAC. We now have a profitable business, and we will use the flexibility to make the trade-off decisions.
I'd much rather have stronger growth in '25, '26, '27, maybe at the expense of a little bit of EBITDA margin because it builds longer term asset value. Hitting a margin goal a year early or late really doesn't help any of us. First and foremost, shareholders are going to benefit from the asset value we're building. But again, the margin target itself, I think, is very well in hand based on our plans.
And then on the Studios side, again, let's go back to what we discussed during the third quarter earnings call. I laid some of the points that impacted 2024. Among others, a year that had a very, very low number of avails in our content library.
We know that 2025 and all of the years in the near future are going to have a much, much better profile. So there is -- that is a major part of the profitability of our Studio. While the film and TV production drives the replenishment of the library, availability days are a major factor.
The other point is, I don't think we're going to see a year like 2024, again, when it comes to what happened in the games business. This was a real outlier to the negative after, maybe a bit of an outlier on the positive in 2023. But based on the restructuring that JB has implemented, I think we're in a much better place.
And remember, we have made real changes when it comes to managing our franchises, when it comes to driving the ancillary revenues in the consumer products segment, experiences, in tourism, retail, all of those things are now coordinated from the moment of greenlight as opposed to being an afterthought previously. And those are real margin opportunities for every dollar we spend.
So I think we're going to see a real step up in EBITDA in 2025. But when David talks about getting the Studio to $3 billion, that's not an end state, that's sort of fixing where we are right now and then growing from there. And we believe the Studio has enormous potential beyond that.

Ben Swinburne

Thanks, Gunnar.

Operator

John Hodulik, UBS.

John Hodulik

Great, thanks for taking the question. Maybe just a quick one on skinny sports bundles. Despite the wind down of venue, it looks like sort of this distribution model is going to proliferate. You have DirecTV, Comcast , it sounds like what's coming from (inaudible)
Just maybe, David, what's your initial thoughts on these bundles in terms of do you think that they're going to see meaningful adoption and drive any sort of meaningful change in either cord cutting or sort of affiliate trends at Warner Bros. Thanks.

David Zaslav

I think part of it is going to depend on the consumer value proposition. The idea of aggregating sports together and offering it on a contemporary platform, where instead of thinking about channels, you can think about sports and go there and see it, is very compelling.
It was one of the reasons that we were driving behind venue. So some of these bundles, if you look at them as contemporary platforms that just provide a better consumer experience, is positive. But it really depends on the value equation.
If it's very close to the price of the overall bundle, what we've seen over the years is that even though consumers might think that, that is what they choose, when they do get the choice, unless it's significantly less expensive, they opt for the bigger bundle where they could see a wealth of other quality content.
And so I think, ultimately, everything we're doing is going to be driven by providing a better consumer experience. And everything we do here is driven by that. And it's one of the reasons why we're so optimistic. When you put TV set on and you see 18 apps and 3 people watching TV at the same time, have their phones out googling where a show is or where sport is, it's not a good consumer experience.
And the value creation over the last 50 years almost always follows a better consumer experience. And that's what we're doing with Disney. That's what we're doing with Verizon when we're together with Netflix. That's what we're doing on our own by having local support, local content together with the best quality TV and motion picture content. But I think there will be an aggregation in a meaningful way behind a couple of the bigger global players.
Because consumers at some point, they're going to say, this is too cumbersome and too challenging, and I just want to put the TV on. I want to go to my phone or whatever device I go to and be able to see the content that I love without having to come in and out of products and without googling where things are.
So I think that's going to be the wind at the back of this industry. And everyone's going to have to get on board with that, because consumers are going to demand it. And that's where we're going.

John Hodulik

Alright, thanks, David.

Operator

There are no further questions at this time. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating in us that you please disconnect your lines.