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Warner Bros. Discovery's (WBD) HBO Cancels Gossip Girl Reboot

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Warner Bros. Discovery (WBD - Free Report) recently announced that HBO Max has canceled the reboot of Gossip Girl after streaming it for two seasons.

The first season of the reboot in July 2021 had set a record as HBO Max’s most-watched opening weekend for an original series at the time. However, the second season couldn’t live up to the expectations of the viewers. Per Deadline, it received better critics scoring, a 100% Rotten Tomatoes rating vs. 69% for Season 1.

The poor performance of the Gossip Girl reboot compared to its original series on Nexstar Media’s (NXST - Free Report) CW Network has caused HBO to bring it down. This comes as another cost-cutting done by HBO on its content slate after it canceled around 36 titles from its service in last year that included Generation, Infinity Train, 12 Dates of Christmas and Sesame Street.

This cost-cutting can be beneficial to the company as it will help it in narrowing its losses and also high debt that currently stands at $50 billion.

The Streaming Division to Aid Warner Bros. Discovery

The streaming platforms of Warner Bros. Discovery that include HBO, HBO Max and Discovery+, which will soon be combined into one streaming platform, ended the third quarter fiscal 2022 with a combined net add of 2.8 million global subscribers, bringing the total to 94.9 million, up 3% from the previous quarter.

Though there was growth seen in the subscriptions, it did not meet the anticipations of Wall Street, which projected a net add of 3.27 million subscribers, per TechCrunch.

This was mostly due to the compromise done on the pipeline of movies and shows to curb expenses that drew viewers away from the streaming platform.

Shares of Warner Bros. Discovery are down 56% year over year against the Zacks Consumer Discretionary sector, which fell 25.1% in the same time frame.

However, the company has been focusing on restructuring its streaming division and has scheduled exciting slates for the coming year to regain its viewership and win the confidence of its audience.

Multiple classic titles like American Hustle, Ghostbusters, John Wick and Matilda have already hit the streaming platform in January. Debuting slates like The Climb and Velma have also been released.

Upcoming shows that are being awaited include White House Plumbers, The Idol, the veteran favorites such as Succession, Barry and more.

Besides this, HBO Max recently announced a hike in its ad-free subscription fee in the United States by $1 to $15.99 a month. This too will bolster the company’s top line and drive its growth.


Zack Rank & Stocks to Consider

Warner Bros. Discovery currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the same sector are Manchester United (MANU - Free Report) and Liberty Global (LBTYA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).

Shares of Manchester United have gained 64.4% in the past year. The Zacks Consensus Estimate for earnings is pegged at a loss of 1 cent, which has been constant over the past 30 days.

Shares of Liberty Global have declined 24.5% in the past year. Its earnings are estimated at 49 cents per share.

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