Warner Bros Discovery has written down the value of its traditional TV networks by $9.1bn, acknowledging that streaming has eroded the value of its channels such as CNN, HGTV and the Food Network.
The film and TV studio recorded a $9.1bn non-cash goodwill charge in the second quarter, stemming from a reassessment of its TV assets’ value since the merger of WarnerMedia and Discovery.
The write-down led Warner Bros Discovery to report a quarterly net loss of $10bn, which compared to Wall Street’s expectations of a $542m loss and exceeded its total revenue of $9.7bn.
The media landscape has significantly changed in the past two years, impacting valuations and expectations for traditional media companies, CEO David Zaslav said in a call with analysts.
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The move away from traditional television to streaming services has led to a decline in advertising revenue and affiliate fees.
Last month, TNT lost out on a broadcast deal to air National Basketball Association (NBA) games, at a time when live sports have become crucial for companies to increase viewership. Disney, Amazon and Comcast acquired the rights for $77bn.
However, the company’s direct-to-consumer customer base grew in the second quarter as a result of cheaper ad-supported offerings and the expansion of the Max streaming service to new markets.
Global direct-to-consumer subscribers at the end of the quarter were 103.3m, up from 99.6m subscribers in the January-March period.
Zaslav said: “Our top priority is our global direct-to-consumer business and we are extremely pleased with the growing momentum we are seeing.”
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