Warner Bros. Discovery Won’t Overspend to Win Streaming Subscribers

David Zaslav, CEO of Warner Bros. Discovery Inc., said the newly established entertainment conglomerate with assets such as CNN, HBO, and Warner Bros will act swiftly to put his vision in place.

Zaslav began leading Warner Bros. Discovery earlier this month after AT&T Inc. spun off the WarnerMedia unit and integrated Discovery. The merger created a media giant that owns HBO and CNN, Warner Bros. Pictures Studios, Cable Network TNT, Food Network, and HGTV.

Discovery's first-quarter revenues increased 13% to $3.16 billion and net income more than tripled to $456 million. This is partly supported by the termination of interest rate derivative contracts related to AT&T transactions.

In the United States, advertising revenue increased by 5%, supported by higher prices. Distribution revenue increased 11%, primarily due to the growth of Discovery +. The company closed the quarter with 24 million direct consumer subscribers, from 2 million subscribers since the end of the fourth quarter.

Mr. Zaslav pointed out that layoffs are likely to occur at the labor conference. The new company has many overlapping areas in various business areas such as government, legal affairs, cable networks, advertising sales, and distribution.