AMC Entertainment It dropped plans to charge customers variable prices for cinema seats.

The company announced its “Sightline” pricing strategy in February and tested it at select locations in three US markets. The program costs moviegoers more to get the best theater seats, or “preferred line of sight” seats.

The program also lowered prices for seats deemed less attractive to patrons, such as those in the front row of theaters.

The change comes as the movie theater industry struggles during its slow summer blockbuster season. And theaters are counting on this week’s releases of Barbie and Oppenheimer to bring much-needed foot traffic to theaters.

Shares of AMC Entertainment fell less than 1% on Thursday. The stock is up more than 5% this year, lagging behind the broader market.

Preferred Sightline seats included select locations in the middle of the auditorium that were preferred by some moviegoers, while Value Sightline seats were those usually located in the front row.

The chain said the program will end at participating locations in the coming weeks.

The decision comes after the pilot program showed moviegoers had little or no interest in sitting in the front row, despite lower prices. The company said it also found that most moviegoers continued to choose the seats they preferred, even at higher prices.

The company added that the focus is ensuring that AMC’s ticket prices remain competitive. Other theater chains like the Regal don’t charge higher prices for better seats.

The movie theater chain said it will now focus on testing front-row seats with more comfortable seats at select locations in the US later this year.

CNBC has reached out to AMC for additional comment.

The main takeaway from NetflixSecond quarter earnings are business… good.

correct. The core business of a large media and entertainment company is fine.

Netflix added 5.9 million subscribers in the quarter, a sign that its primary initiative for 2023 — cracking down on password sharing and launching a cheaper $6.99 per month ad category — is bringing in new subscribers. Netflix added 1.2 million subscribers in the US and Canada in the quarter — its biggest regional quarterly gain since 2021.

This is not the story for the rest of the media industry. Disney And Warner Bros. Discovery The year was spent cutting content from streaming services to avoid paying waste and saving on licensing fees. Both companies have laid off thousands of employees over the past 12 months to boost free cash flow. Paramount Global And ComcastBoth NBCUniversal affiliates said that 2023 would be the largest annual loss ever for their broadcast businesses.

Meanwhile, Netflix boosted its free cash flow estimate to $5 billion for the year. Previously, the company had estimated it would have $3.5 billion in revenue, but strikes by actors and writers would reduce spending on content. This means that Netflix will actually get more money than you previously thought.

In the next quarter, Netflix expects subscriber gains to be around 6 million again. The company said revenue will accelerate in the second half of the year as it sees the “full benefits” of its password-sharing campaign and steady growth in its ad-supported plan.

In the past year, Netflix’s rating has dropped 60% as subscriber counts have stalled. The company spent a significant amount of time on earnings conference calls focusing on and explaining its new video game business, which was introduced in mid-2021, to help kick-start a new growth narrative.

This quarter’s shareholder letter barely addresses video games.

Why? Because unlike the rest of the media industry, Netflix doesn’t need a new narrative. The old one still works. The flow is increasing. Stacks of liquidity are on the rise. The announcement excites investors. Netflix has a steady pipeline of international content and a deep library to outpace the extended writers and actors strike.

“The lack of references to video games in the shareholder letter suggests advertising is the shiny thing that dominates most of the company’s focus,” said Ross Bennis, an analyst with research firm Insider Intelligence.

Shares of Netflix fell 5% after hours. That’s more of a symptom of profit-taking after Netflix’s big gains this year (up more than 62% as of Wednesday’s close) than anything to chafe in its preliminary quarterly numbers.

After a sharp fall last year, the company is back on track. And you didn’t even need to switch trains.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

— CNBC’s Lillian Rizzo contributed to this article.

Companies and industries have ups and downs. Old media industry in a valley.

The first half of 2023 was a huge disappointment for media executives who wanted this year to be a rebound from a terrible 2022, when a slowdown in subscriber flow slashed ratings. NetflixAnd DisneyAnd Warner Bros. Discovery And Paramount Global to almost half.

Instead, investors are once again excited about Netflix’s future prospects as it cracks down on password sharing, which could lead to tens of millions of new sign-ups. Shares of Netflix have soared in the past five months, outperforming the S&P 500.

Meanwhile, the old players couldn’t get out of their own way.

“When it rains, it rains,” said Rich Greenfield, media analyst at LightShed. “It just keeps getting worse.”

It’s been a bumpy ride for Disney CEO Bob Iger since he returned to lead the company late last year. Disney It recently finished laying off 7,000 employees. Chief Financial Officer Christine McCarthy stepped down last week. The company is pulling programming from streaming services to save money. Its animation business is in serious trouble, with its latest Pixar movie, “Elemental,” scoring the studio’s lowest opening weekend gross since the original “Toy Story” premiered in 1995. Stock has struggled in the past five months.

Paramount Global It cut its dividend last quarter as broadcast losses peaked this year and a weak advertising market exacerbated the ailing cable network business. Wells Fargo issued an analyst note Friday saying the company’s bull case and bear case are the same: selling for parts. Said Warren Buffett, perhaps the most famous investor in history CNBC said the Paramount streaming show “Basically, it’s not good for business.”

NBCUniversal weathered the storm better, shielded by its parent company, Comcast, which derives its revenue from its cable and wireless assets. The above errors have also been taken advantage of. MSNBC has become no. 1 cable news network this month for the first time in 120 weeks, ousting Fox News amid coverage of former President Donald Trump’s federal indictment. The Super Mario Bros. Universal’s Movie is the year’s biggest box office hit, yet stocks haven’t moved much.

All of this is happening with an expanding strike of Hollywood writers playing out in the background with no end in sight. Writers know that the longer the strike lasts, the greater the pain will be inflicted on the media companies, who will eventually run out of content already written. Zaslav recently gave a commencement speech at Boston University and was drowned out in boos and cheers of “pay your book.”

This week may bring more bad news. Film and TV actors are set to join the writers’ strike unless they reach an agreement with Hollywood studios by Friday.

Greenfield said the beneficiaries of shutting down work in Hollywood will likely be YouTube, TikTok and Netflix, which continue to produce international content not affected by the strike.

Legacy media may get a small respite if advertising jumps back up as the 2024 US presidential campaign heats up. But there is still little evidence that investors will reward media companies simply for cutting costs. There is currently no solid growth narrative for legacy media, and merger prospects are murky as regulators block media-adjacent deals like Microsoft’s acquisition of Activision and Simon & Schuster’s proposed Penguin Random House purchase.

The industry has just concluded its annual advertising gala in Cannes, France. Old media executives still shell out company dollars for a yacht lounging trip and rosé drinking. The background was as beautiful as ever.

But the scene is bleak.

Disclosure: Comcast owns NBCUniversal, which is the parent company of CNBC.

WATCH: Mark Reid, CEO of WPP, on the state of the advertising market, from Cannes Lions 2023

the Netflix The crackdown on sharing passwords was in its early days in the US, but it appears to have an effect the streamer was looking for – a boost to its subscriber base.

Since alerting its members in late May of its new password-sharing policy, Netflix has had four single days to sign up for US customers since data provider Antenna began tracking the service. In that time, Netflix has seen nearly 100,000 subscriptions a day in two days, according to a report from Antenna.

On May 23, Netflix began sending emails to members that it was changing its sharing guidelines, meaning that accounts would only be shared within the same household.

“Your Netflix account is for you and the people you live with – your family,” the company said in an email sent to members since then.

As part of the new policy, members have two options for people who use their passwords outside their home. Either you transfer the profile to someone outside of their household so that person can start a new membership that they pay for themselves, or the member pays an additional fee of $7.99 per month for each person outside their home.

Since the email went live, Netflix has averaged 73,000 daily subscriptions, up 102% from the previous 60-day average, which outpaced the spike in subscriptions during the pandemic’s initial lockdowns, according to Antenna.

Read more: Netflix’s expected password-sharing campaign is putting college students on edge

Streaming services like Netflix saw a significant increase in subscribers in the early days of the pandemic when consumers were at home during lockdowns. However, this subscriber growth slowed in the following years.

In 2022, Netflix began to experience stagnant subscriber growth, and like other media companies, it began looking for ways to increase revenue. In addition to cracking down on password sharing, Netflix has also introduced a cheaper, ad-supported tier.

While Netflix stock took a hit after reporting its first subscriber loss in a decade last year, it has since rebounded with the introduction of password-sharing guidelines and ad-supported streaming. Its stock hit a 52-week high on Friday, and is up more than 40% since the start of the year.

The company said more than 100 million households subscribe to the accounts — about 43% of its global user base — which affects its ability to monetize new content.

Netflix began rolling out its password sharing guidelines to international markets earlier this year. It delayed its crackdown on password sharing in the US from the first quarter to the second quarter.

Disney He urged a federal court to deny a request from the Florida governor. Ron DeSantis disqualifies the judge presiding over the company’s lawsuit, accusing the governor and his allies of political retaliation.

DeSantis’ attorneys argued that Judge Mark Walker should recuse himself from the lawsuit because of his comments in two separate cases that indicated a clash between the governor and the entertainment giant.

Disney — which has been in a dispute with DeSantis since last year, when the company vetoed his bill that critics have dubbed “Don’t Say Jay” — responded that the defendants’ argument failed to meet legal criteria for disqualification.

“Judges are not precluded from accurately indicating widely reported news events during oral arguments, nor must they exclude themselves if cases involving those events come before them months later,” Disney attorneys argued in a lawsuit Thursday.

“Disqualification is only permitted if prior comments reveal a judge’s inability to consider the new case on its merits,” the lawyers wrote, adding that the judge’s comments in question “do not approach that standard.”

Disney’s lawsuit alleges that DeSantis “orchestrated at every step” a campaign to punish the company for speaking out against a Florida bill that limits classroom discussion of sexual orientation or gender identity. Disney claims this alleged scheme is now threatening the company’s business.

“The case we filed last month has made our position and the facts very clear,” Disney CEO Bob Iger said during the company’s earnings call earlier this month. “And that really this is about one thing and one thing only and that’s retaliation against us for taking a stand on pending legislation.”

The attempt to remove Walker as judge in Disney’s civil case in U.S. District Court in Tallahassee, Florida, came days before DeSantis launches his 2024 presidential campaign. The governor, seen as former President Donald Trump’s main competition for the Republican nomination, has gained ground Patriotic for his participation in many political battles.

The long-running fight between the aspiring politician and one of his state’s top employers spilled over into the courts after the governor’s hand-picked officials voted to cancel Disney’s development deals for its Orlando-area parks.

Disney filed its lawsuit in late April after the new board of directors for its own district voted to back out of development contracts the company said it entered into to secure its investment. The company has since updated that lawsuit to include newly passed legislation targeting the monorail system as further evidence of the governor’s retaliation.

DeSantis’ next goal was to move to replace Walker. Walker was nominated to serve as a judge of the United States District Court for the Northern District of Florida in 2012 by then-President Barack Obama.

In 2018, Walker ruled against the state and ordered then-governor Rick Scott to restore voting rights to felons after they are released from prison.

That same year, he ordered the Florida Department of Corrections to continue providing a transgender female prisoner with hormone therapy and to provide her with feminine underwear and personal care products. The prisoner, who was diagnosed with gender dysphoria, was placed in an all-male reformatory.

DeSantis’ representatives did not immediately respond to CNBC’s request for comment.

World Wrestling Entertainment and UFC-owned Endeavor to merge this year in a deal that will create a sports-entertainment giant valued at more than $21 billion.

After the deal was announced in early April, WWE shares rose to their highest level in nearly four years. The stock is up more than 50% so far this year.

But for wrestling fans, the story is not about those numbers. Instead, the success of the merger hinges on what actually happens in the ring – and whether it’s worth their time and money.

In a landscape where consumers wield vast economic and political clout, the merger will be a test of just how strong the collective power of fans will be against corporate giants. And wrestling fans aren’t afraid to share their opinions.

Some worry that a return to pay-per-view form for WWE’s flagship event, WrestleMania, is on the horizon. Last month, it aired exclusively on NBCUniversal’s Peacock, generating the streaming service’s highest weekend usage ever. Although NBCU doesn’t release specific broadcast numbers for the event, only the Super Bowl has surpassed WrestleMania in the most watched hours of any live Peacock event, according to the company.

WWE’s exclusive broadcast deal with Peacock, which includes the rights to broadcast WrestleMania, is set to expire in 2026.

WWE declined to comment for this article. In late March, before the UFC deal was announced, WWE CEO Nick Khan said the company was mindful of fans’ price sensitivity.

“If NBCCU comes to us and says, ‘Hey, we’ll take you from where you are now to five times for Peacock, but we need to charge you extra,’ we’d have to take a hard look at that,” Khan told the Marchand and Aurand Sports Media podcast. We don’t want to underestimate our fans.”

Longtime fan Jerry Derasmo who hosts a wrestling podcast said he understands why WWE might eventually switch WrestleMania to pay-per-view. However, he also believes that it’s one of the few things that can actually turn off large numbers of fans. He said that many fans have told him they would join podcasts like his rather than pay $60 or $70 to watch pay-per-views.

Fans said the way WWE will tell its stories and conduct matches under the new executive system will also help determine how they spend their money.

“The biggest concern from a fan standpoint — not from an investors standpoint, but from a fan standpoint — is creative control,” said Matt Corsell, a longtime wrestling fan and host of the WWE Podcast.

In this case, there is an elephant in the room and his name is Vince McMahon. For many WWE fans, whether they will pay for the new streaming or pay-per-view services depends largely on whether McMahon, 77, who has dominated WWE since taking over from his father in 1982, gets involved in creative decisions.

Despite numerous settlements with women who have alleged sexual misconduct by McMahon, including an allegation of rape, which he denies, he remains at the helm of WWE.

“This guy, for better or worse, has been controlling the biggest wrestling company in the world,” said Jimmy Baxter, a New Jersey-based professional wrestling commentator and podcaster. “For that, it was a success story, but along the way, there was a lot of blood, sweat, and tears — and a lot of paid women.”

McMahon isn’t going anywhere, at least not anytime soon. He will be CEO of the new combined company, which has yet to be named, alongside quest CEO Ari Emanuel. After 40 years, many fans view him as a permanent fixture, even if he’s not the CEO.

“When the bombs fall, there will be three things left: the cockroaches, the Twinkies and Vince McMahon,” said Baxter.

McMahon told CNBC last month that he won’t be deeply involved in WWE’s storytelling when the WWE and UFC merge — but fans say they need more evidence before they accept his statements at face value.

“As much as they want to tell us he’s not ‘in the weeds’ creatively, there’s been a lot of evidence lately that Vince is,” Corsell said, including rumors that he was running the show backstage on Raw after WrestleMania.

There are other content concerns, too.

In late April, a former WWE writer sued the company, claiming she was fired in retaliation for responding to racist pitches in a writer’s room, according to court documents. The complaint lists McMahon and his daughter Stephanie McMahon, herself a former executive, as defendants, as well as WWE itself and other behind-the-scenes employees of the company.

“We know what Vince McMahon is; we know what he brought to the table creatively,” Corsell said. “For the last five to 10 years, it hasn’t been the best it could be, from a fan standpoint.”

However, fans keep coming back for more. Anyone who has paid thousands of dollars on wrestling events and merchandise over the years wouldn’t immediately stop watching if the new WWE wasn’t about to take the plunge in their eyes. Some longtime hardcore fans aren’t sure where they’ll land yet, but they’ll likely stick around to see where things go from here.

“I absolutely love drama,” said Baxter. “I love watching a crazy old man burn his empire to the ground just because he can.”

Disclosure: Peacock is the streaming service for NBCUniversal, the parent company of CNBC.

Florida. On Friday, Ron DeSantis signed legislation that effectively eliminates development agreements Disney It struck shortly before the governor selected a new board of supervisors to oversee the company’s parks in Orlando.

The development deals are at the center of the latest battle in a year-long war between Disney, one of Florida’s largest employers, and DeSantis, a Republican likely preparing for a 2024 presidential campaign.

The governor’s office confirmed the signing of the law in a press release that did not include any other information or notes on the legislation.

The bill, which passed the state’s Republican-majority legislature just a day earlier, follows DeSantis board members voting to void the deals, claiming they were made illegally. Disney says the contracts are designed to help secure long-term development plans amid rising tensions with DeSantis and his allies.

Members of both parties, including Trump, have criticized DeSantis’ fight with Disney.

“This feud between DeSantis and Disney is insane,” Linda Stewart, a Democrat who represents Florida’s 13th Senate district, told CNBC. “Every day there seems to be another way of trying to make things more difficult for Disney, but all they’re doing is costing taxpayers money to hire lawyers to defend what they’re doing.”

Stewart voted against the latter legislation.

Disney sued DeSantis and board members last week, alleging a campaign of political retaliation spearheaded by the governor. The council returned a few days later.

Disney declined to comment.

The spat began more than a year ago, after Disney denounced a Republican-backed Florida bill that would limit segregation discussion of sexual orientation and gender ideology, which critics have dubbed “Don’t Say Like Me.”

Soon after, DeSantis and his allies moved to dissolve the special taxation district that has allowed Walt Disney World to essentially run its operations since the 1960s.

The 25,000-acre estate, formerly called the Reedy Creek Improvement District, was eventually kept intact — but given a new name, and its five-member board of directors replaced with numbers chosen by DeSantis.

In March, the new board of directors accused Disney of crafting 11-hour deals that undermined its power. Disney says its communications are openly fraudulent, and that it does not undermine the board’s oversight of the region’s operations.

The company’s federal civil lawsuit asks the court to “prevent the state of Florida from weaponizing government power to operate in private business.”

DeSantis signed a bill nullifying the Disney deals on the final day of the 2023 Florida legislature session. The governor, who was resoundingly re-elected in the November midterm elections, is seen as the biggest potential challenger to former President Donald Trump for the 2024 Republican presidential nomination. .

The legislature, which holds Republican supermajorities in both houses, has passed bills that have helped enact DeSantis’ broad conservative agenda — with an eye toward divisive cultural issues that could reverberate in the Republican primary race.

DeSantis has continued his attacks on Disney, even as the drawn-out battle has led some Republicans to question his strategy.

In addition to voiding development deals, the Florida legislature passed a measure that would have the state Department of Transportation conduct inspections of monorails at Walt Disney World. Stewart said Disney hasn’t had any major safety issues with its monorail system since 2009, when a worker was killed after two vehicles collided. She questioned the timing of the new procedure.

“Obviously it’s about the response,” Stewart said.

Earlier this month, the State Board of Education approved an expansion of the classroom law that started the feud with Disney.

Corporate stories have their ebbs and flows, ups and downs.

to this point, BuzzFeedThe company’s journey as a public company has been an endless pit. Co-founder and CEO Jonah Peretti may be running out of time to turn his company around.

The digital media company known for its checklists and tests in crisis mode. Its stock is down 95% since the company went public at $10 a share in December 2021. Shares closed Friday at roughly 54 cents, giving the company a market valuation of about $86 million.

If the company trades for 30 consecutive business days below the $1 mark, Nasdaq will send a notice of shortage to the company, giving it an additional 180 days to reach the higher $1 mark or risk being written off. BuzzFeed has traded for less than $1 for six straight days as of Friday’s close.

There are loopholes and conditions. BuzzFeed can perform a reverse stock split to artificially increase its share value and stay in compliance — a move last year the insurer implemented. hippopotamus After the average closing price was less than $1 during a consecutive 30-day trading period. Hippo continues to survive as a listed company.

Peretti’s plan is to get the shares back above $1 by convincing investors that he’s ready to run a more profitable company. That’s what prompted him to shut down BuzzFeed’s Pulitzer Prize-winning but money-losing newsroom last week and lay off 180 employees, or 15% of the company’s staff.

“I’m trying to set us up for a better future and keep us in line with the main trends,” Peretti said in an exclusive interview with CNBC. “If I do it well, my leadership will be successful. If I don’t, it won’t be.”

BuzzFeed reported a net loss of $201 million for 2022 (including a non-cash goodwill impairment charge of $102.3 million) after making a profit of $26 million in 2021. The company’s Investor Day is May 11th. Peretti will try to convince shareholders that his vision must be trusted.

He admitted that it was fair to question Peretti’s decision not to shut down BuzzFeed News earlier. CNBC reported in March last year that investors had asked him to shut it down.

However, he said he has no plans to step down as CEO or sell the company despite the company’s 95% loss in value.

“I would be more interested in my leadership if I didn’t see where the market was going,” he said.

Peretti hopes that incorporating more AI into company content will boost engagement and save costs for the company. In the past two months, BuzzFeed AI-powered quizzes have resulted in a 40% increase in how long a user has participated compared to human-generated quizzes, Peretti wrote on BuzzFeed’s blog Thursday.

“Formats developed before the AI ​​revolution, and many of the media industry’s formats and conventions will need to be updated and adapted, or start to feel outdated and outdated,” Peretti wrote in the post. “This is why we are investing in AI-powered content and launching new formats like Infinity Quizzes and Chatbot Games.”

Some of Peretti’s predictions seem inconsequential when you think about what the next version of the Internet might entail. He wrote that he expects news homepages to resurface as social media companies like Facebook, TikTok and Twitter turn their backs on news for more public entertainment. That’s why he’s confident in the future of the HuffPost brand BuzzFeed, which rose in popularity during the mid-2000s with its creative headlines.

“In fact, on Monday of this week, HuffPost logged 16 million page views—a record since joining BuzzFeed, Inc.—a sign that prediction is indeed coming true,” Peretti wrote.

Peretti said he believes BuzzFeed can operate profitably by “covering trends, making shopping more fun, creating new interactive AI formats, and helping creators connect with our audience”.

This could also be wishful thinking if the digital audience has moved beyond old ways of using the internet and toward augmented reality and gaming, as BuzzFeed has no current strategy.

BuzzFeed’s announcement in January that it would begin using artificial intelligence to help create quizzes gave BuzzFeed a brief surge in value, as shares jumped 120%.

But for the most part, BuzzFeed stocks have all been a ladder with no ladder.

BuzzFeed went public via a Special Purpose Acquisition Company, or SPAC, to great fanfare on Dec. 3. 6, 2021. For a moment that day, shares jumped from $10 to over $14. BuzzFeed’s valuation briefly rose above $1.5 billion — more than triple the amount Disney offered to buy it a decade ago, as shown in an excerpt from a new book by former BuzzFeed News editor-in-chief Ben Smith.

In those early hours of trading on the first day, an entire industry began to think differently about its future. If BuzzFeed could find an audience among public investors, companies like Vice, Vox Media, Group Nine and Bustle Digital Group — all of whom had venture capital backers who wanted a return on their investment — could either go public or take publicly traded shares as part industry-wide accumulation.

Then the market turned. BuzzFeed ended the day down 11%. The next day, the stocks fell again. By the end of the first week of trading, shares were down 39%.

“I just bought quite a few shares of BuzzFeed at $6,” Brian Goldberg, CEO of Bustle Digital Group, told CNBC at the end of the first week. “If it goes down, I’ll back up the truck.”

BuzzFeed shares are down. and less. By June, shares were under $2. The advertising market began to decline as interest rates rose and corporate valuations fell. Shares first fell below $1 last month. (Goldberg said he didn’t actually buy the stock until it was close to $1 and then sold it during the February AI pop.)

With their fates tied to BuzzFeed’s performance, digital media companies have given up on the dream of aggregation and public experience. Vice announced this week that it is restructuring its global news operation, including laying off 100 employees. The company has been looking for a buyer for over a year. Vox Media sold a 20% stake to privately held Penske Media in February for a $100 million capital injection. Vox and Group Nine merged last year.

Instead of BuzzFeed being the flag bearer for the digital media industry, it now appears trapped on an island, forced to capsize in public as onlookers shake their heads. When it went public, BuzzFeed promised increased revenue, estimating $654 million by the end of 2022, $833 million by the end of 2023, and $1.1 billion by the end of 2024.

BuzzFeed’s actual annual revenue for 2022 was $437 million. Predictions for 2023 and 2024 currently look like pipe dreams.

Peretti may only have one chance to change his company’s fate.

“This seems like an inflection point,” he said.

WATCH: The full CNBC interview with BuzzFeed CEO Jonah Peretti in 2021 when it first came to market

Netflix It’s set to report first-quarter earnings after the bell on Tuesday, and investors will be paying close attention to its subscriber numbers, especially for the ad category it supports.

Although Netflix will no longer provide subscriber guidance, it will continue to report the total number of users, both in the US and globally, each quarter.

Here’s what Wall Street expects, according to analysts surveyed by Refinitiv:

• Earnings per share: Expected $2.86
• he won: $8.18 billion expected

On Tuesday, Netflix said goodbye to what it started – a DVD mailer company, sending discs in red envelopes to customers. The company’s co-CEO, Ted Sarandos, said in a blog post that it would finally wind up its DVD business, which “continues to shrink.”

A year ago, Netflix reported its first subscriber loss in a decade, sending its shares plummeting, as well as those of its media peers. The results prompted Netflix and its streaming competitors to focus on profits over subscriber numbers.

The results of the new ad-supported level in the country will be our top priority. Last November, Netflix unveiled its cheapest tier with commercials, which costs $6.99 per month. The ad-supported tier came shortly after losing subscribers as the competition in streaming intensified.

Sarandos recently said that the company will likely offer several ad-supported tiers in the future.

Another focus for Wall Street will be Netflix’s crackdown on password sharing. Late last year, the company said it would begin implementing measures to get people who borrow from other accounts to create their own.

The company said more than 100 million households subscribe to the accounts, or about 43% of its global user base. Netflix said that affected its ability to invest in new content. Both the ad-supported option and the crackdown on password sharing are intended to increase revenue.

In February, Netflix outlined password sharing guidelines for four countries: New Zealand, Canada, Portugal, and Spain. The company said it will require users in those countries to select a “primary location” for their accounts, and allow users to create up to two “sub-accounts” for those who don’t live in their home base for an additional fee.

The company has yet to provide guidance on password sharing for the United States, although it is expected to do so this year.

humble as it may be, Warner Bros. Discovery CEO David Zaslav this week proved he’s definitely a name-dropper.

Warner Bros. Discovery unveiled its new streaming service on Wednesday, which includes a host of shows from HBO Max and Discovery+. It will be released on May 23 in the US, later this year in Latin America, and in the rest of the world in 2024. It will be called Max — sans HBO.

On a surface level, Warner Bros. Discovery’s decision to ditch the HBO Max name is a logical marketing choice. In depth, it begins to feel like a microcosm of the existential tension that lies at the heart of the company – and the media industry more broadly.

The company is trying to compete with Netflix And Disney Being the winner of the live stream, while at the same time pushing a message of financial discipline that lowers the priority of your streaming subscriber additions. It’s a matter of quality versus quantity, and Warner Bros. Discovery tries to play both sides.

said JB Perrette, the company’s president of broadcasting, during a presentation presenting Max on Wednesday in Burbank, Calif.

Perrett on Wednesday explained why Warner Bros. Discovery has removed the HBO part of the name from the new service. He said HBO is synonymous with adult entertainment, and Max will tend to offer programming for children and families.

“We all love HBO,” Perrett said. “It’s a brand built over five decades to be a trendsetter in adult entertainment. But it’s not exactly a place where parents can easily drop their kids off. Not surprisingly, the category hasn’t met true potential on HBO Max.”

Warner Bros. Discovery executives felt that the HBO name actually limited the streaming service’s audience because it intimidated potential audiences. They also felt that the HBO brand could be diluted by the influx of reality TV shows on Discovery that are set to join the platform, such as “Dr. for conversation over the water cooler in the office.”

“HBO is not television. HBO is HBO. It has to stay that way,” Perrett said at the event. “We would not drive it to its breaking point by forcing it to assume the full scope of this new content proposition had we kept the name in the service brand. By doing so, we will upgrade and better showcase our unrivaled suite of other content and branding services that will be key to expanding The scope of attractiveness of this improved product.

The company’s logic is rational. HBO appeals to a certain audience, but it also doesn’t appeal to a certain audience. HBO fans aren’t going to unsubscribe from the service in response to Max’s name, but some folks who used to be intimidated by HBO may now just subscribe to the adult brand due to the flood of obvious HBO content coming to the service.

When HBO Max initially launched, executives at AT&T and WarnerMedia assured subscribers that this new app was, first and foremost, the home of HBO. Now, about 80 million subscribers later, this point is less important. Those who want HBO already know where to find it, and HBO Max will simply switch to Max on most platforms.

Broadcasting is entering its “teenage” years, Perrett said, and Max as a name makes more sense to continue adding subscribers globally in a world of declining growth.

That would be the end of the story if Warner Bros. did. The stated goal for Discovery was to increase (no pun intended) the number of subscribers who signed up for the Max.

That was every media company’s goal when Zaslav agreed to merge Discovery with WarnerMedia in 2021. But according to Zaslav, that’s no longer a priority.

“I’d rather have 100 million subscribers or 150 million subscribers and be really profitable than try to scale to get too many and end up losing money,” Zaslav told CNBC’s Julia Burstein after the presentation on Wednesday. “We take a look at what people are watching on Max and we can see exactly what they like and don’t like. And some of the things they don’t watch, we can put on AVOD for free.” [advertising-supported video on demand] And some of the things they don’t watch, we can keep non-exclusively on Max, but we can also sell to others.”

“We’re relentlessly focused on creating great content and monetizing in every way we can,” he said.

With a new broadcast strategy — and Max at the center — Warner Bros. Discovery hedges its bets.

The company maintains Discovery+ for customers who are happy to pay $5 or $7 just for Discovery programming. Perrett said the company “doesn’t want to leave any lucrative subscribers behind.”

Zaslav also hinted at Warner Bros. The free, ad-supported Discovery service, which the company said is coming later this year.

Warner Bros. Discovery could have worked for HBO Max, too. For customers who wanted both Discovery+ and HBO Max, it could have offered a bundle at a discount. That’s been the strategy for Disney, which offers bundled ways to mix and match Hulu, ESPN+, and Disney+.

Instead, the company has loaded up one service with everything it has, which may also eventually include some news from CNN and sports like NBA or NHL games. Zaslav said Wednesday that he would get more details on that “in the coming months”. Don’t forget, Zaslav killed CNN+ as a standalone broadcast option last year after about a month in existence.

Warner Bros. Discovery is building the Max as a one-size-fits-all option that has a scale to go around in an ever-increasingly fast post-cable world.

But Zaslav also tells investors it’s okay to limit Max’s growth. It is more important for him to make money than to compete with Disney and Netflix to become the largest streaming operator in the world.

It’s a delicate balance: DisneyAnd Paramount Global, ComcastNBCUniversal and even Netflix They are all fighting the same forces. Investors have shifted the spur-of-the-moment growth-at-all-costs narrative in the past year, halving the valuations of many media and entertainment companies.

What is happening now is, in essence, a hedge. The media industry knows that broadcasting is the future, but growth has slowed. Zaslav defended the value of the traditional pay-TV package while criticizing the former WarnerMedia system’s profligate spending on broadcasting. He’s trying to give investors a new reason to get excited about Warner Bros. Discovery. That message, Zaslav hopes, is to generate free cash flow.

“In the end, I’m the free cash flow guy,” Zaslav said Wednesday. “We want great talent, but in the end, if we don’t make sign-up money, if we don’t have any ARPU… [average revenue per user]We don’t help ourselves and we don’t help shareholders.”

There are some signs that he could be on to something. Warner Bros. Discovery shares are up nearly 50% this year after falling nearly 60% last year.

But when you take a two-part name — HBO and Max — and keep just Max, the implication is “big” over “quality.”

That was the AT&T message. It wasn’t Zaslav’s message yet.

WATCH: The full CNBC interview with Warner Bros. Discovery CEO David Zaslav

Disclosure: CNBC’s parent Comcast owns NBCUniversal and co-owns Hulu.