Warner Bros Discovery, Inc. (WBD) 51st Annual J.P. Morgan Global Technology, Media and Communications Conference Call Transcript

Summary of Warner Bros Discovery, Inc. Conference Call Company Overview - Company: Warner Bros Discovery, Inc. (NASDAQ: WBD) - Event: 51st Annual J.P. Morgan Global Technology, Media and Communications Conference Call - Date: May 24, 2023 Key Points Launch of Max - The launch of the new streaming service Max was a significant milestone for the company, combining the offerings of WarnerMedia and Discovery [2][3] - Initial subscriber engagement exceeded expectations, with technical metrics showing improvement over the previous product [3][4] - The company aims to leverage the combined content portfolio to enhance viewer engagement and reduce churn [4][17] Financial Guidance and Performance - Warner Bros Discovery provided financial guidance for the year, projecting EBITDA between $11 billion and $11.5 billion, with a free cash flow conversion of 33% to 50% [10][11] - The first quarter marked a return to profit growth, with expectations for continued free cash flow growth [11][12] - The advertising market is showing gradual improvement, with optimism for future growth [12][18] Content Strategy and Viewer Engagement - The company is focused on improving viewer engagement through better content discovery and recommendation systems [6][36] - The integration of HBO Max and discovery+ is expected to enhance daily engagement and reduce churn rates [36][61] - The pricing strategy for streaming services is under review, with potential for upward adjustments to reflect the value of content [39][40] Theatrical Releases and Future Films - The theatrical market is recovering, with Warner Bros Discovery committed to a flexible theatrical window strategy [66][69] - Upcoming films like "The Flash" and "Barbie" are anticipated to perform well, contributing to the company's growth [75][76] Gaming and Interactive Content - The success of "Hogwarts Legacy" reinforces the company's strategy to monetize its IP across multiple platforms, including gaming [78][79] - Future gaming releases, including "Mortal Kombat," are expected to further capitalize on the company's strong IP portfolio [81] Challenges and Market Dynamics - The linear television business is expected to decline gradually, but the company is managing costs effectively to maintain free cash flow [20][22] - The competitive landscape in streaming is evolving, with discussions around potential consolidation in the industry [56][54] International Expansion - Warner Bros Discovery plans to expand the Max product internationally, with launches in Latin America and EMEA markets scheduled for 2024 [31][34] Advertising Opportunities - The company sees significant potential for advertising growth on both D2C and linear platforms, with a focus on data-driven advertising strategies [44][50] Conclusion - Warner Bros Discovery is strategically positioned to leverage its combined content offerings, improve viewer engagement, and capitalize on growth opportunities in both streaming and gaming sectors while navigating the challenges of the evolving media landscape [60][81]