Now it’s official: AT&T and Discovery have completed the merger of WarnerMedia and Discovery. Eventually this deal will lead to a streaming service offering.” the most diverse content catalog in the world “.
Merge streaming platforms HBO Max and Discovery+
Announced last year and then formalized last March, the merger between the two entertainment giants is worth $43 billion and will create a new branch called Warner Bros. Discovery. With it, streaming services HBO Max and Discovery+ are expected to eventually merge and unite two strong content libraries with high-value intellectual property, offering a variety of content that Netflix has taken many years to source.
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In addition to the films from the Warner Bros studio, HBO Max contains world-renowned series such as Game of Thrones, Euphoria and Succession. The content that Discovery+ offers is very different and combines reports, documentary series and reality shows. Subscribers to the service will have access to nearly 200,000 hours of programming; Warner Bros. Discovery will de facto become the third largest streaming service in the world, after Netflix and Disney+.
The group will also introduce the new CNN+ service, as well as many US channels including NT, TBS, Food Network, Investigation Discovery, TLC, Discovery, truTV, Travel Channel, MotorTrend, Animal Planet, Science Channel, New Line Cinema, Cartoon Network, Adult Swim, HGTV and HBO. Initially, Discovery+ and HBO Max should be offered as a bundle like Disney+, Hulu and ESPN+, but they will be merged later.
” With WarnerMedia, Discovery inherits a talented and innovative team and a dynamic and growing global business that is well positioned to lead the ongoing transformation in media and entertainment, direct-to-consumer distribution and technology. The combination of the two companies will strengthen WarnerMedia’s established and dominant position in media and broadcasting. AT&T CEO John Stankey said in a press release.
AT&T returns to its historical sector
This is a huge blow to AT&T, which will be able to partially pay off its monumental debt of 151 billion dollars. Having acquired WarnerMedia in 2018, the telecom giant now wants to focus on its historic sector: “ We are at the dawn of a new era of connectivity and today marks the beginning of a new era for AT&T. With the closing of this transaction, we plan to invest at record levels in our 5G and fiber growth areas, where we have strong momentum, as we strive to become the best broadband company in America. At the same time, we will increase our focus on shareholder returns. We plan to invest for growth, strengthen our balance sheet and reduce our debt, while continuing to pay an attractive dividend that places us among the best dividend-paying stocks in the United States. “, so explained John Stankey.
The creation of Warner Bros. Discovery will also bring about a major change in the team. While WarnerMedia CEO Jason Kilar recently announced his departure, it is David Zaslav, leader of the Discovery group, who will take everything under his wing. He has surrounded himself with a management team made up mainly of people he trusts, and he plans to maintain a direct hierarchical relationship with the managers of companies that he does not know well.
” Today’s announcement marks an exciting milestone not only for Warner Bros. Discovery, but also for our shareholders, our distributors, our advertisers, our creative partners and, most of all, consumers around the world. Through our collective assets and diverse business model, Warner Bros. Discovery offers the most differentiated and comprehensive portfolio of content in film, television and broadcast. We believe we can offer more choice to consumers around the world while fostering creativity and creating shareholder value. Can’t wait for the two teams to come together to make Warner Bros. Discover the best place for powerful storytelling “, he declared.
Mega mergers for users or investors?
This new transaction follows major mergers in the broadcast and entertainment sectors. Following the acquisition of MGM Studios by Amazon as well as 20th Century Studios by Disney, Microsoft also recently announced the acquisition of Activision Blizzard, a true giant in the video game sector. The giants thus continue to solidify their offer as the market becomes increasingly competitive.
As noted the edgeHowever, these mega mergers seem to be geared more towards investors than consumers: “ In practice, we are more likely to end up with confusing production ethics, weird mixes of content suggested by algorithms, and more consumer frustration with finding what they want to watch. “.
As a reminder, HBO Max and HBO had 73.8 million subscribers worldwide at the end of 2021, while Discovery had 22 million.