Warner Bros. Discovery (WBD -0.96%) has had a challenging run this year. Formed from the merger of WarnerMedia and Discovery in spring 2022, the media company has focused on slashing debt, reducing its headcount, and trimming its content offerings. Yet, despite the stringent cuts, Warner Bros. Discovery's stock price has sunk more than 50% since the beginning of 2022. Now there are signs things could get even worse.

Warner Bros. Discovery's questionable subscriber numbers

A recent lawsuit filed in Illinois accuses the company of presenting improper sign-up figures for its streaming platforms. The Collinsville Police Pension Board (CPPB) alleges Warner Bros. Discovery, which claims more than 92 million subscribers, has inflated the number by as much as 10 million. Lawyers for the CPPB say Warner Bros. Discovery has incorrectly counted customers of AT&T -- WarnerMedia's previous owner -- who were given access to HBO Max yet actually never logged in.

The merits of the lawsuit are still to be worked out, and so it would be presumptive to say Warner Bros. Discovery is in any real trouble here. Yet, should a judge allow the class action suit to move forward, then Warner Bros. Discovery may be forced to reveal information about how it counts subscribers -- precise details it has not previously shared in a public arena. Such exposure may present a reason for some investors to be wary of Warner Bros. Discovery's reported figures until the company proves its innocence.

Price rises could land at the wrong time

Warner Bros. Discovery CFO Gunnar Wiedenfels recently suggested the company's streaming services -- HBO Max and Discovery+ -- are currently "underpriced." Speaking at a conference, Wiedenfels signaled Warner Bros. Discovery could raise prices when it combines the two platforms into a single offering next summer. However, with fears of a global recession on the horizon, any such increases may arrive at an inopportune time.

As things stand, Discovery+ starts at $4.99 per month with ads, or $6.99 without. HBO Max begins at $9.99 per month with ads, topping out at $14.99 a month without. Combined, the pairing of the ad-free services is already more expensive than Walt Disney's Disney Bundle ($19.99 per month) and Netflix's Premium tier ($19.99 a month).

It's possible that Warner Bros. Discovery could follow Walt Disney and Netflix's lead by pricing its repackaged streaming offering at the $20 per month mark, but that seems to run counter to what Wiedenfels has indicated. After all, the CFO said HBO Max and Discovery+ are too cheap as is. But for argument's sake, should Warner Bros. Discovery land on $20 a month, it would still represent a significant price hike for those who currently subscribe to only HBO Max or Discovery+. And should a jump in costs come amid an economic downturn, then it's reasonable to think many customers could opt out of the service.

Streaming rivals are launching ad-supported tiers

Perhaps Warner Bros. Discovery's biggest threat over the coming months will be from rivals Walt Disney and Netflix. Both have ad-supported tiers in the works, which will directly compete with the entry-level offerings of HBO Max and Discovery+.

Walt Disney has announced its ad-supported tier will cost $7.99 a month, while Netflix is reportedly considering charging customers $7 to $9 per month. For Warner Bros. Discovery, these prices not only threaten to undercut its $9.99 HBO Max tier, but they could effectively set the market price for ad-based offerings. After all, Walt Disney has 221.1 million global streaming subscribers, and Netflix 220.1 million, overshadowing Warner Bros. Discovery's subscriber base by significant margins.

Considering all these factors, it is clear that Warner Bros. Discovery faces many challenges if it hopes to see its stock price rise once again. Of course, it is possible that, once HBO Max and Discovery+ have merged, the company will be able to focus its resources and chart strategies for growth. However, with increased competition and greater scrutiny over its operations, it seems the company will have a lot to contend with for some time to come.