$150 billion media merger you should know about 🤞

$150 billion media merger you should know about 🤞

What happened—media company WarnerMedia will be spun off into an independent business by its owner AT&T, merging it with Discovery group of companies, creating a streaming first media behemoth of about $150 billion in value.

WarnerMedia owns prominent brands like HBO, CNN, WarnerBros, DC, Pogo, while Discovery owns TLC, Discovery channel, and other lifestyle brands, all of which will now be offered to consumers via a single streaming service.

Other details:

  • Joint company will be led by Discovery CEO David Zaslav
  • $20 billion to be spent each year on making shows/movies
  • Target is to crush the streamers Netflix, Disney, and Prime Video

Why is this happening—old media companies are reeling under the assault of tech-first streaming media platforms, as nobody watches TV anymore, and globally cable connections are being cut down at an alarming pace.

When was the last time you put on Discovery anyway...

But then, the profit pools of old media, secured via bundled pricing, fine print, jacked up cable prices, and practices of casually nickel-and-diming consumers, meant the old guys were just too comfortable lying in their cozy bed of cash profits to act, even if they saw disruption coming close on the horizon.

Anyway, once Wall Street started sniffing the shift to online streamers, old-media stocks were hammered for poor growth, which finally served the wake up call to the industry. Half-assed streaming transformations were promised, and the entire media game now realizes that big changes are due for survival in the post COVID world.

Going forward—largest media conglomerate in the world, Disney, was the first to wholeheartedly accept its fate, and made a 100% pivot to streaming with Disney+.

Irrespective of the intermittent hiccups, in 2 years, they managed to scale to 100 million users and that’s looking good. The No. 2 and the rest of the guys are hoping for a similar journey now. Whoever doesn’t, meanwhile risks going obsolete.

But then, kicking off a streaming operation is one thing, growing it to 200 million paid subs like Netflix?