About two years back, Warner Bros. Discovery, a media conglomerate that deals with television networks, film production studios, and streaming services. It resulted from the merger of Warner Media and Discovery. One of the most important industry that the company has got itself into is the streaming industry. Their venture into this particular industry has been quite successful due to HBO Max and Discovery+ being massive hits. Although the company has faced difficulties in competing with other popular names in the industry like Netflix and Amazon Prime which are already set in the industry, they have recently turned a corner as their streaming service in the United States has reported profits for the first time. The company’s shares which fell down earlier have gone up since but have not yet reached the point they declined from.
Credits: Getty Images
Success in the streaming industry:
During the recent years, Warner Bros. Discovery made significant investments in its streaming services. This has proved to be a very good move for the company given the current trend that is running around the entire world and especially in the United States. People from all backgrounds are now shifting towards streaming services from cable television. They correctly analyzed this shift in consumer preferences and used it to their benefit. This move was a success for the company which reported a significant rise in their revenue from the streaming services after they were introduced.
Why streaming services over television?
Unlike traditional cable television, streaming services provide greater flexibility and convenience to their viewers. The content which is available on these platforms can be accessed by the users at any time they wish to watch it which cannot be done with usual television. Apart from the on-demand content that can be accessed from any device with an internet connection, viewers can also rewind, slow down and even fast forward what they are watching. These services offer a lot lesser ads to the viewers and are a lot more customized to meet their preferences and likings. There are numerous movies and T.V. shows which are made available on these platforms a lot before they make it to television or any other source. Moreover, the cable television in the United States and even in other parts of the world has grown a lot more expensive than what it used to be and offers poorer quality content as compared to streaming services. As a result, viewers are increasingly turning to streaming services.
Although it is a well known fact that the streaming platform was a huge success, it is important to note that their success did not come without challenges.
One of the biggest problems for Warner Bros. Discovery was the presence of other companies in the field which offered similar services and already had a set customer base. Their competitors were larger and more established than them. Prominent streaming services like Netflix and Amazon Prime were therefore difficult to deal with for the company. These companies had a massive user base and significant resources which Warner Bros. Discovery lacked. In response to this problem, they had to focus on developing unique and exclusive content that would not be available elsewhere on the television or other streaming platforms. The introduction of such content on the platform also led to users being attracted to it.
The pandemic posed another challenge for the company as it led to the postponement of several shows and movies. This made it more difficult for the platform to introduce new content which could retain their user base in times where they were relying on streaming services for their entertainment.
Recently, Warner Bros. Discovery had been suffering losses and had to deal with a 5% decline in their share price in early trading. However, with the financial benefits they gained from their streaming services, they have managed to get their stocks back up by 3%.