On Thursday before the bell, Warner Bros Discovery Inc (NASDAQ:WBD) reported its first quarter results and came short of estimates. Earlier this week, it announced it will be teaming up with The Walt Disney Company (NYSE:DIS) to offer a streaming bundle in an effort to further strengthen its positioning in streaming against market leader, Netflix (NASDAQ:NFLX).

First Quarter Highlights

For the quarter ended on March 31st, WBD reported revenue dropped 7% YoY to $9.96 billion, which was short of LSEG's estimate of $10.231 billion.

WBD's bottom line improved from last year's comparable quarter when it reported a net loss attributable to shareholders of $1.07 billion, or 44 cents per share, to a net loss of $966 million, or 40 cents per share, while LSEG expected a lesser loss of 24 cents per share. Adjusted EBITDA were down about 20% as they amounted to $2.1 billion.

Dented by lingering effects of last year's Hollywood writers and actors strikes, along with a weak gaming release of the latest iteration of Suicide Squad, the studio segment revenue contracted 12% to $2.82 billion.

Fortunately, when it comes to streaming, WBD told an entirely different story.

Streaming Is Growing

During the reported quarter, WBD added 2 million direct-to-consumer streaming subscribers, with the total now being 99.6 million. Streaming revenue modestly increased to $2.46 billion, earnings an adjusted $86 million. But advertising revenue for streaming skyrocketed as it grew a tan impressive rate of 70%.

The Disney streaming bundle is WBD's latest attempt to squeeze profitability of its direct-to-consumer platforms that are facing fierce competition. By joining forces with its rivals, like Disney, WBD will be able to better serve price-sensitive consumers and by doing so, challenge the market leader, Netflix. As of this summer, Max, Disney+ and Hulu will be offered in a bundle to consumers this summer. Although nor Disney nor WBD disclosed the pricing, it is known that the bundle will be offered at a discount.

Advertising improved only when it comes to streaming.

Although advertising was strong in streaming, it told an entirely different story when it comes to WBD's TV networks which continued to be weak as a whole. TV networks segment reported revenue tanked 8% to $5.13 billion, while advertising dropped as much as 11%.

Therefore, advertising only improved on the digital and streaming front, as the traditional TV segment continues to fall behind.

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