AT&T has struck a deal with Discovery Inc. that’s sure to catch HBO Max and Discovery+ subscribers attention.
Pending regulatory approval, Discovery will combine with AT&T’s WarnerMedia to create a media juggernaut that would unite brands like the DC Comics Universe, HGTV, Warner Bros., HBO, Food Network, children’s content and a portfolio of valuable sports broadcasting rights under one roof.
And Discovery Inc. CEO David Zaslav has high expectations for the new company, which he will run. Both Stankey and Zaslav have said the combination will benefit shareholders, but what does it mean for consumers?
The deal will likely mean a future offering from the combined companies, which have each rolled out their own direct-to-consumer streaming platforms over the last year.
The format of the new, combined company “will accelerate and assure its place as a fully scaled and differentiated global streaming platform,” Stankey told investors.
If regulators approve, the combined, yet-to-be-named company would be publicly traded and include nearly 80 million subscribers off the bat and more than 200,000 hours of content. Together, the companies said they reach one in every five American TV consumers each day.
“The very simple mission here is not just that we’re better together [on] the media side but that we’re probably the best media company in the world,” Zaslav told CNBC Monday.
Discovery already offers an ad-supported low-cost version of its streaming service Discovery+ and AT&T expects to roll out a similar version of HBO Max later this year as it expands the service overseas.
AT&T and Discovery are positioning the deal as allowing the new company to compete with the likes of Netflix and Disney. The two companies already spend a combined $20 billion creating new content annually, compared to Netflix’s $17 billion and Disney’s more than $14 billion.
AT&T CEO John Stankey believes the lack of overlap in content portfolios between WarnerMedia and Discovery is “great for the customers,” he told CNBC Monday.
But both companies have been short on details regarding what the new product will look like when packaged together. Zaslav said Monday that the name of the new company would be announced in “the next few days.”
With the deal, AT&T is essentially offloading the WarnerMedia business to Discovery Inc. while maintaining a majority ownership stake. It touts that owning WarnerMedia and its broad library of content for the past several years helped it grow the HBO Max subscriber base through bundling the nascent streaming service with telecom giant AT&T’s other services like internet and wireless plans.
But both companies have been short on details regarding what the new product will look like when packaged together. Zaslav said Monday that the name of the new company would be announced in “the next few days.”
With the deal, AT&T is essentially offloading the WarnerMedia business to Discovery Inc. while maintaining a majority ownership stake. It touts that owning WarnerMedia and its broad library of content for the past several years helped it grow the HBO Max subscriber base through bundling the nascent streaming service with telecom giant AT&T’s other services like internet and wireless plans.
