WarnerMedia and Discovery to merge as streaming battle escalates
James R | On 23, May 2021
WarnerMedia and Discovery are looking to merge, combining Warner’s entertainment, sports and news library with Discovery’s non-fiction and international entertainment and sports businesses to create a bigger media player in an increasingly competitive streaming landscape.
The new company will bring together HBO Max with Discovery’s own streaming platform, Discovery+, which launched in the UK last and year and the USA earlier this year. That means almost 200,000 hours of programming, spanning HBO, Warner Bros, Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, ID and more.
The transaction is anticipated to close in mid-2022, subject to approval by Discovery shareholders. Should it all go through, the result will be a sizeable entertainment hub, and the world’s second biggest media group in terms of revenue, behind only Disney, which closed its own merger with 20th Century Fox recently.
The result is also a sense of deja vu, after telecoms firm AT&T, which owns WarnerMedia, HBO and CNN, snapped up those brands in 2018 through its purchase of Time Warner for $100 billion-plus. Going back even further, AOL took over Time Warner for about $160 billion. Warner’s library is one reason for its attractiveness to other companies, and speculation has already arisen that WarnerDiscovery (or whatever they call the merged brands) is being structured ready for a future sale to another player. Indeed, Amazon is currently in the market for an acquisition, with talks reportedly underway for the potential purchase of MGM.
In the meantime, it strengthens HBO Max’s position in the marketplace, as it looks at the idea of expanding beyond the USA – something unlikely to happen in the UK for several years, due to HBO’s existing exclusive deal with Comcast-owned Sky TV. Discovery+ reportedly has about 15 million subscribers, while HBO Max has about 64 million subscribers, but even combined that lags behind Netflix (208 million) and Disney+ (100 million).