Warner Bros. Discovery’s stock had a strong trading day after announcing a deal with Charter Communications to bring the Max streaming service to standard cable packages. The stock closed up 10.3% at $7.66, recovering from recent losses. The deal will bring ad-supported versions of Max and Discovery+ to Spectrum cable customers at no extra charge, eliminating the $15 add-on fee for adding Max to their package. Spectrum customers already have access to a $65 cable bundle including Disney+ and Paramount+.
Since January, Warner Bros. Discovery shares have dropped more than 33%, despite reporting 103.3 million streaming subscribers in the second quarter and adding 3.6 million subscribers. CEO David Zaslav expects Max to draw an increase of six million subscribers in the latest quarter. However, the company is facing challenges, including dependence on a declining cable TV business and the potential loss of its NBA media rights partnership with TNT. The company sued the NBA for not accepting its $1.8 billion proposal, leading to a $9.1 billion write-down of struggling TV networks.
Charter Communications recently reported a loss of 393,000 TV subscribers in the second quarter, which is significantly higher than the 193,000 lost in the same period last year. Video revenue also declined by 7.7% year-over-year, totaling $3.9 billion in the second quarter as cord-cutting continues to impact the company. Integrating streaming platforms like Max into cable bundles could help Charter offset some of these losses. Warner Bros. Discovery’s deal with Charter marks a strategic move for both companies in navigating the evolving media landscape.
The agreement between Warner Bros. Discovery and Charter comes at a time when both companies are facing challenges in the shifting media industry. Warner Bros. Discovery’s stock has experienced significant fluctuations, despite adding millions of streaming subscribers. The company’s reliance on traditional cable TV and potential loss of major media partnerships are raising concerns among investors. Charter Communications is also grappling with a decline in TV subscribers and revenue, emphasizing the need to adapt to changing consumer preferences by integrating popular streaming services into its offerings.
By bringing the Max streaming service to Spectrum cable packages at no extra cost, Warner Bros. Discovery is positioning itself to reach a broader audience and potentially drive subscriber growth. The deal with Charter could help both companies navigate the increasingly competitive streaming market and attract more customers by offering popular services like Max and Discovery+ as part of their cable bundles. As the media landscape continues to evolve, partnerships between traditional cable providers and streaming platforms are becoming essential for staying relevant and meeting consumer demands.
