Restructuring and Reporting in Media Companies: Profits and Streaming

Companies often change the way they report results by creating divisions to showcase specific aspects as profitable or growing. For example, Disney separated its streaming division to highlight growth, despite incurring losses, to cater to Wall Street's focus on growth. On the other hand, Warner Brothers Discovery created a direct-to-consumer business combining linear HBO and streaming to emphasize profitability over streaming profits, leveraging HBO's profits to justify their streaming business's profitability. However, this approach masks the declining profits from HBO's linear subscribers. The significant investment in streaming has impacted HBO's profitability, reducing direct-to-consumer profits to just 5% of its previous profits, indicating the need for substantial improvements to restore HBO's profitability.