Even as Warner Bros. Discovery yesterday posted larger-than-expected losses in the first quarter of 2024 ending March owing to slow advertising sales, the company has said it would join Disney to offer a bundled streaming service comprising Disney+, Hulu and Max in the US starting this summer.

According to a Reuters report yesterday, WBD posted a quarterly loss that was larger than expected as advertising sales slumped at its cable TV unit and the studio segment contended with the fallout of last year’s Hollywood strikes and poor demand for a ‘Suicide Squad’ game.

The results amplified the media companies’ struggles with subdued advertising in the U.S. and certain international markets as businesses responded to the possibility of higher-for-longer interest rates with a tight leash on costs.

Ad revenue at the company’s networks segment fell 11 percent in the first quarter. On Tuesday, rival Disney also reported a drop in its traditional TV business.

The streaming unit remained a bright spot for Warner Bros Discovery, adding two million subscribers and reporting a 72 percent jump in adjusted core profit to $86 million.

Investors have pushed for a focus on profitability and away from boosting subscription, as Netflix consolidates its leading position in the streaming wars.

Warner Bros Discovery on Wednesday joined hands with Disney to offer a bundle of the Disney+, Hulu and Max streaming services in the US, starting this summer. The companies, along with Fox Corp, had unveiled a sports-streaming venture earlier this year.

WBD CEO David Zaslav, according to the Reuters report, said the company “was hopeful” it would reach an agreement with the NBA to keep the league on Max and TNT, which has held those rights for almost four decades.

That helped shares trade flat after tumbling premarket as NBA rights are considered central to the company’s efforts to drive growth in its streaming business and retain cable customers.

Warner Bros Discovery “will become a weak third leg” in the new sports-streaming venture if its NBA deal is not renewed, said Ross Benes, senior analyst at Emarketer.

The company’s studio revenue was hit by the underperformance of the game ‘Suicide Squad: Kill the Justice League’, compared with 2023’s top-seller ‘Hogwarts Legacy’.

Revenue at the business fell 12 percent, despite ‘Dune: Part Two’, which is 2024’s highest grossing movie to date with a worldwide box-office collection of over $700 million.

The company continues to face challenges posed by the twin Hollywood strikes last year, which led to production delays and fewer episodes during the first three months of the year. Revenue of $9.96 billion missed estimates of $10.23 billion, according to LSEG data.

As far as the proposed bundled streaming services go, customers will be able to sign up on any of the three individual websites and choose from an ad-free or ad-supported plan. No prices have been disclosed yet.

Both Disney and Warner Bros are trying to build their streaming businesses as customers ditch traditional cable packages, in part because many of them rejected having to pay for a large bundle with dozens of channels.

But as the number of streaming apps exploded, consumers have complained about having to sign up for multiple subscriptions.

The Disney/Warner bundle will simplify payment with one bill, and possibly offer a discount from the cost of subscribing to each app separately, the Reuters report added.