On top of that, the company’s marquee streaming service, Max (formerly HBO Max), continued a worrisome streak of subscriber losses. The service’s subscriber count tumbled 700,000 in the third quarter after declining by 1.8 million in the second quarter, for a total six-month loss of 2.5 million subscribers. It ended the latest quarter with a total of 95.1 million subscribers.

Given the widespread impact of the recently-ended Hollywood strikes it would be no surprise if subscriber numbers declined across the board among entertainment giants—but that wasn’t the case. 

While Max lost subscribers in the latest quarter, Netflix added 9 million, partially thanks to its successful crackdown on password sharing. Meanwhile, Disney+ added 7 million subscribers, Paramount+ added 2.7 million, and NBCUniversal’s Peacock added 4 million. 

“The underperformance by Warners is a bit of a disappointment given that everyone else has done better,” Naveen Sarma, a managing director at S&P Global, told Fortune.

Investors considered it a disaster, sending the company’s stock tumbling. Its shares fell nearly 20% to close at $9.40 on Wednesday, before modestly rebounding to $10.13 on Friday.

Though Max has long been touted as the champion of prestige television, with acclaimed series such as The Sopranos, Game of Thrones, and Succession, subscribers are nevertheless leaving. There are a couple of reasons why, according to Sarma. 

Sports and strikes

For one, until recently, Max didn’t stream live sports as its competitors do. The platform announced that it would offer a free live sports streaming tier that includes MLB, NHL, NBA, College Basketball, and U.S. Soccer from Oct. 5 until March 2024, after which it will cost an extra $10 monthly. In contrast, Disney has long owned ESPN and ESPN+, Apple TV hosts Major League Soccer and carries MLB games, and Peacock simulcasts several sports, including NFL games and WWE events. 

Sports are one of the few must-watch TV programming left, and it’s one of the last things keeping viewers from cutting their cable cords. That’s why it’s so crucial for streaming services to offer it—to keep existing subscribers and lure new ones. Without the buffer of sports entertainment, Max is more vulnerable to the “cyclical pressures on TV advertising,” Sarma said. 

“People are still watching the NFL, and advertisers are still advertising on the NFL,” Sarma added. “That probably benefited NBC, Paramount, and Disney’s ad numbers versus Warner Bros.,” because of its limited presence in streaming sports. 

Warner Bros. sees “encouraging” results only six weeks after launching its sports offering, Warner Bros. Discovery CEO David Zaslav said in an earnings call on Wednesday. “Churn is down and engagement is up. The people that are watching, in many cases, are people that don’t have TV, so we’re reaching a whole new audience, and the audience is younger,” he said.

“Our sports business is meaningful. For the last several years, we’ve seen the advantage of sports on subscription,” Zaslav added, referring to the broader streaming industry. “But we don’t own all of sports, so the idea of being able to put it on our platform is great.”

The Hollywood strikes also had a role to play in Max’s declining subscribers. In the same call, Warner Bros. Discovery CFO Gunnar Wiedenfels called the hemorrhaging of subscribers a “modest sequential loss” largely a result of an “extraordinarily light content slate.” 

The nearly four-month long Hollywood strikes put a halt to the production and releases of new television and film projects. And as Warner Bros. Discovery produces a significant line up of content for its own streaming platform, and distributes content for or co-produces with third parties, the work stoppage had a particularly large impact on the company. 

That differs with Netflix and its earnings, which far surpassed analysts’ forecasts. Netflix’s release schedule was minimally affected by the strikes since the work stoppage began after many of its programs had been completed, like the Japanese manga adaptation Once Piece and new seasons for shows like Virgin River. 

Meanwhile, Disney is gearing up to expand ESPN from a cable TV channel only to a standalone “direct-to-consumer” streaming product. The company also reported better-than-expected profit and additional planned cost cuts, sending its stock jumping 8% to a high of $91.04 per share on Thursday, the day following its earnings announcement.

“Nothing cures a media company like having content,” Sarma said. “The fact that the strike has ended and we can get back to production is going to be a really good thing for everybody.”