Despite Warner Bros. Discovery (WBD) reporting weaker-than-expected first-quarter earnings, missing on both the top and bottom lines, the company recently announced a new bundle option that has sparked optimism. WBD plans to go in on a streaming bundle partnership with Disney (DIS).
To shed light on why WBD's streaming initiative could potentially add value, Bank of America Securities Senior US Media and Entertainment Analyst Jessica Reif Ehrlich joins Catalysts.
Ehrlich acknowledges that while WBD did miss revenue and earnings estimates, its performance on the direct-to-consumer side was "pretty solid." She further expresses her belief that "the best is yet to come," particularly with Max. Ehrlich notes that Max is rolling out globally and is now focused on adding more original content and shows to its lineup.
Regarding the bundle announcement, Ehrlich views it as "a trend that will continue." The analyst argues that bundling "decreases churn," as it keeps individuals engaged on a certain platform due to the vast array of content available for consumption, making this move "very positive."
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When it comes to the deal talks between Paramount Global (PARA) and Sony (SONY) and Apollo Global Management (APO), Ehrlich adopts a cautious stance, suggesting a "wait-and-see" approach to determining the outcome. "There's a lot of questions, and no one is speaking publicly at this point," she remarks, highlighting the uncertainty surrounding these negotiations.
Note: Apollo Global Management is Yahoo's parent company.
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This post was written by Angel Smith