We know that video streamer Netflix (NFLX) had no shortage of success with its password-sharing crackdown. The project brought in millions of new subscribers and plenty of new revenue. Meanwhile, media giant Warner Bros Discovery (WBD) is likely hoping for even a sniff of that success as it plans a similar crackdown of its own.
The new crackdown will start later this year with the Max streaming service and will expand outward in 2025, reports noted. Not surprisingly, the crackdown comes around as more and more streaming platforms look to improve their profitability and build on the sheer amount of content they have already brought into the fold.
Warner is no doubt hoping that the same thing that happened to Netflix will happen here, where it will turn out that Warner has always had a massive subscriber count but most of them were sharing subscriptions with others.
Cost Cutting Continues
Warner is also looking to reduce its expenses. It recently sold off another chunk of real estate at Hudson Yards in New York City. Part of that plot will be going to Convene, a hospitality company that will have a 72,000-square-foot event venue on the 24th floor of the building and a 3,000-square-foot retail space on its ground floor to serve as a lobby and showroom.
Furthermore, Warner is paring back its gaming operations after the disastrous run of Suicide Squad: Kill the Justice League. Most of that paring is taking place at Rocksteady Games, where, reports note, the quality assurance team has been cut by over half, and developers with “specialized knowledge” are being shown the door. This is leaving a lot of trouble behind for the survivors, who are now being assigned much larger workloads. Senior management notes that product quality will likely be impacted as a result.
Is Warner Bros Discovery Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on 10 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 36.81% loss in its share price over the past year, the average WBD price target of $12.50 per share implies 69.95% upside potential.
