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As you are likely well aware already, AT&T announced last week that it was merging WarnerMedia with Discovery. In a deal that should close in mid-2022.
On Monday, John Stankey, the CEO of AT&T mentioned that the company’s focus on its connectivity business (that includes mobile, internet, etc), meant that it did not have the reach to grow HBO MAX internationally. And AT&T decided it was time to “unleash the media assets” of WarnerMedia to Discovery.
Stankey also noted that “what’s become clear is the opportunity for direct relationships with consumers is truly going to be a global opportunity. As a result of that, when you look at the opportunity to grow a fantastic subscriber base we kind of looked at this and said ‘it’s time to unleash the media assets to go and seize a multi-hundred-billion-dollar opportunity.”
This is a blessing for Discovery
AT&T looking to merge WarnerMedia with Discovery, is a blessing for Discovery. The company entered the streaming wars pretty late – in January 2021. While discovery+ is definitely one of the cheaper streaming services out there, starting at $4.99 per month, it does not have a lot of content compared to competitors.
Discovery is more about lifestyle content. Owning channels like Discovery, TLC, HGTV and a few others. Which isn’t that appealing to everyone, like what HBO MAX has, or even Disney+. Without a buyout or a merger, discovery+ was not going to last very long. It just would not have grabbed as many subscribers as they’d like.
However, for AT&T this is basically the company admitting that they shouldn’t have bought Time Warner in 2016 for $85.4 billion. It tried to become a company that made content and delivered content. And that seems to have not worked for them. Though they will still own a majority share of the new company when WarnerMedia and Discovery merges next year.