Warner Bros. Discovery experiences a significant drop with 1.8 million subscriber loss in Q2

**Disney and Warner Bros. Discovery Face Subscriber Losses in Streaming Wars**

**Disney Loses 4 Million Subscribers After Losing Rights to Indian Premier League**

In the second quarter of the fiscal year, Disney CEO Bob Iger saw a loss of 4 million streaming subscribers after his India-based Hotstar video platform lost the rights to Indian Premier League cricket matches [^1^]. This loss of subscribers highlighted the impact that content rights can have on a streaming service’s success.

**Warner Bros. Discovery Suffers Subscriber Churn After Rebranding HBO Max**

Similarly, Warner Bros. Discovery faced a significant loss of subscribers after their heavily criticized rebranding of Max, which involved dropping the recognizable name of HBO [^2^]. This decision to rebrand and merge platforms resulted in 1.8 million paying customers leaving the service in the second quarter [^3^]. Warner Bros. Discovery’s CEO, David Zaslav, acknowledged the churn but emphasized their focus on profitable growth rather than chasing subscribers at any cost [^4^].

**Challenges of Churn and Revenue Disparity**

One of the biggest challenges for streaming services is churn, where subscribers sign up for a special offer and then cancel shortly afterward, often in favor of a competitor’s platform [^5^]. Warner Bros. Discovery’s loss of 1.8 million subscribers highlighted this issue.

Furthermore, Zaslav faced the issue of revenue disparity between U.S. and international subscribers. The loss of 1.3 million U.S. subscribers, who generated an average revenue of $11.09 per user, had a significant impact on the company’s earnings compared to their international subscribers, who generated only $3.65 per user [^6^].

**The Broken Business Model of Linear Broadcasting**

Media giants now face the challenge of adapting to the changing landscape brought about by on-demand streaming. Viewers are increasingly opting for streaming services that offer convenience and personalized content options, rather than traditional linear broadcasting [^7^]. The traditional business model of linear broadcasting is deteriorating, leading companies like Disney to consider selling stakes in ESPN and ABC to maximize their value [^8^].

**Disney’s Struggles and the Moment of Truth**

Disney, despite being one of the first on the streaming market, has not been able to escape financial losses. Reportedly, Disney+ has incurred over $10 billion in cumulative streaming losses since its launch in 2019 [^9^]. To address this, Disney introduced a lower-priced streaming tier supported by ads and implemented budget cuts of $3 billion [^10^].

Additionally, Disney had to announce an impairment charge of up to $1.8 billion due to the cost of removing shows from its streaming platform, including some original programming, which increased their cloud hosting bills [^11^]. The upcoming fiscal third-quarter results on August 9th will reveal how Disney+ is faring, but executives have already warned of widening operating losses [^12^].

In conclusion, both Disney and Warner Bros. Discovery have faced challenges in the streaming wars. The loss of subscribers due to content rights issues, rebranding woes, churn, and revenue disparities between U.S. and international users have affected their profitability. To overcome these challenges, companies must adapt to the changing business model of linear broadcasting and find ways to retain subscribers while managing costs effectively.

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