WarnerMedia is merging with Discovery to create a new company. What does this mean for the ongoing Streaming Wars?
Big business news today: according to Variety, AT&T is spinning off WarnerMedia — the media conglomerate that operates HBO, HBO Max, CNN, Adult Swim, DC Films and much more — and merging it with Discovery, the media conglomerate that operates Discovery Channel and the Discovery+ streaming service. The new company, which doesn’t have a name yet, will be controlled by shareholders from both companies: 71% from AT&T and 29% from Discovery. The whole thing will be headed up by Discovery president and CEO David Zaslav.
What does this mean? Well, for AT&T, it may be an opportunity to give up on running WarnerMedia (formerly Time Warner), which it bought in 2018 for $85 billion but never seemed to quite know what to do with. According to Bloomberg, which originally broke this story, AT&T is “one of the world’s most indebted companies,” so maybe this is a way to take some of the pressure off themselves so they can focus on building up their 5G network.
As for us, it’s unclear that this means. Will AT&T still offer HBO Max free to subscribers? Will there be any shakeups with content? The best case scenario I can think of is that AT&T keeps offering free HBO Max to folks who subscribe to their cable packages, and that all the content on Discovery+ gets integrated into HBO Max, which has the bigger footprint. After all, the whole point of a merger like this is to become big enough to compete in the streaming wars against giants like Netflix and Disney+, so that move makes sense to me.
But will it make sense to Zaslav and the other decision-makers? For now, he’s weighing the options. “We want our company to be the place ”, he said. “If we are successful with that, the free cash flow is going to grow.”
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h/t The A.V. Club