Warner Bros. Discovery (WBD -1.39%) has frequently made headlines this year as CEO David Zaslav restructures the company, prioritizing profitability. Many of the company's recent moves have brought significant changes to the company's streaming service, HBO Max, with not all changes being positive. 

Here's why investors will want to hold off putting their faith in Warner Bros. Discover for now.

Risky content shifts

Zaslav is working toward paying down a debt of approximately $55 billion that Warner Bros. Discovery assumed after the merger of WarnerMedia and Discovery. The sizable undertaking has seen Zaslav make several controversial moves concerning HBO Max, such as cancellations in European content and live-action family series, and ceasing production on a nearly completed film resulting in the loss of $90 million.

While many of the moves have the potential to cut down costs in the short term, it's the long-term consequences that investors should consider. According to a study by Axios, Latinos are more likely to subscribe to multiple streaming services than the average American, with 38% of Latino homes paying for cable and streaming services versus the overall U.S. average of 29%. Additionally, the group's subscription rates to such services as HBO Max, Netflix, and Disney+ are 9% higher than the average American.

The statistics on Latinos are significant, as Warner Bros. Discovery's recent changes in its streaming content have the potential to alienate a vital sector of the population. The most notable cancellations on HBO Max have been the live-action children's series Gordita Chronicles, abandoned on July 29, and Batgirl, the DC film shelved on Aug. 2. Both of these titles starred Latina actresses, with Gordita Chronicles following a Dominican family moving to Miami in the 1980s and Batgirl featuring afro-Latina actress Leslie Grace in the titular role. Grace's role in the film would have been the first time a person of Hispanic or African descent independently led a DC film. 

To be fair, Warner Bros. Discovery explained these cancellations as shifts in business strategy. Gordita Chronicle's removal will see the company move away from live-action family content, while the cancelation of Batgirl comes as the company ceases developing films for streaming and opts for theatrical releases. After failing to do well with test audiences, Zaslav made the decision to scrap Batgirl, determining its scale didn't quite suit a theatrical debut. 

These cancellations may decrease the company's current content budget, saving much-needed money now. However, potentially driving away a key demographic could be detrimental in the long run. The move is even riskier, considering how much the competition strives to cater to this vital group of viewers.

Behind the competition

Streaming giants Netflix (NFLX 0.82%) and Disney (DIS 0.15%) are Warner Bros. Discovery's biggest competition and are also clearly aware of the importance of catering to essential demographics. 

Netflix has long made a point of filling its library with Latino and Spanish-language titles. Popular series such as Selena: The Series, Money Heist, and Jane the Virgin are just a few shows to see significant success on the platform. Money Heist Part 5 continues to be Netflix's third-most-watched show of all time, with 792.2 million viewing hours, while Part 4 ranks number six with 619 million viewing hours. Additionally, Netflix's Spanish-language film Roma, set in 1970s Mexico City, won three Academy Awards in 2019. 

Moreover, Disney has featured Hispanic actors in starring roles on both Hulu and Disney+ with such series as Love, Victor, Diary of a Future President, and Only Murders in the Building -- the most-watched comedy on Hulu ever. Disney has seen first-hand what representation can do for viewership and box office revenue with Black Panther, the first Marvel film to be led by a Black actor, becoming the top-grossing superhero movie of all time in the U.S. in 2018. The immense success of Black Panther was owed, in part, to the African-American fans who came out in the millions to watch the movie. 

Warner Bros. Discovery's apparent absence of prioritizing the biggest-spending demographic could possibly highlight a lagging multicultural and international mindset necessary to win the streaming wars. Netflix's and Disney's success alone has proven that while representation is beneficial to society, it can also maximize profits by encouraging a wide range of different viewers to tune in.

As the Hispanic population makes up one-sixth of the streaming market in the U.S., Warner Bros. Discovery may be leaving a growing portion of a $10.2 billion market on the table for the competition to take. That's worrying since the company's streaming business lost $1.5 billion in revenue in its most recent quarter.

Should you invest?

Warner Bros. Discovery stock is down 46% since April and 7% in the last week. The company is going through a major restructuring that will likely determine its success and profitability for years to come. Unfortunately, recent content shifts, a lack of focus in key markets, and the merger of HBO Max and Discovery+ in the works make the stock's future too hazy to safely buy the dip.

Streaming stocks such as Disney and Netflix, even with its recent tumbles, are a safer bet than Warner Bros. Discovery right now.