AT&T and discovery to merge into one huge streaming platform | Gadget theory

US telecommunications heavyweight AT&T decided to merge WarnerMedia with Discovery to form a mega-streaming giant. This brings together two of Hollywood’s biggest studios along with Discovery’s channels into one huge streaming platform. AT&T owns HBO, CNN, and Warner Bros. – which they bought in 2018 when they bought Time Warner in a deal that cost $ 108.7 billion. This means they are the latest streaming platform in an increasingly busy market.

The two companies will join the forces

The merger would include franchises such as Warner Bros. Bringing entertainment together Harry Potter en Batman, together with the channels of Discovery that dominate the market for home, cooking, nature and science.

AT&T CEO John Stankey said: “This agreement unites two entertainment leaders with complementary content strengths and positions the new company as one of the leading global streaming platforms for direct.

Stankey continued: “It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies that can be reinvested in producing more great content to give consumers what they want.”

WarnerMedia is the owner of HBO and HBO Max, which speaks to 64 million subscribers around the world, perhaps because of popular shows like Game of Thrones en Follow-up. However, Netflix still dominates the company with 208 million subscribers, and Disney + also dominates with about 100 million own subscribers.

The merger hopes to create a new flowing container

Discovery owns Animal Planet and the Discovery Channel, and reaches approximately 88 million homes in the United States. It launched its own streaming service in January 2021, and it currently has about 15 million subscribers. According to AT&T, Discovery chief executive and president David Zaslav will lead the joint venture.

Then Ives told Wedbush Securities BBC that: “This is a streaming arms race and AT&T is taking an offensive strategic step to further expand its content in the fight against Netflix, Disney and Amazon. The acquisition of Time Warner and the golden jewel HBO assets was the first step with Discovery – a doubling of this flowing striving.

In accordance with the terms of the deal, AT&T will receive $ 43 billion and its shareholders will own 71% of the new company and Discovery shareholders will own 29%. Chief Investment Officer David Cummings told the BBC that before the deal was confirmed, shareholders may have been uneasy.

He said AT&T really needed to increase content due to the increase in competition in the streaming world, but he said: ‘The market may feel that this deal is a bit too late; I expect the market to be a bit skeptical. ”

Discovery Networks present at summer TCA Tour 2019

AT&T took over Time Warner several years ago in hopes of creating a telecom and media giant that would combine both content and distribution. It ended up being quite expensive because the company also upgraded the next generation of wireless services at the same time.

To finance the purchase of wireless spectrum, it added $ 14 billion to its debt. The agreement with Discovery is intended to reduce some of the company’s debt.

The agreement is expected to close sometime in mid-2022, and is subject to regulatory approval. Some analysts have said they cannot rule out “several other potential suitors entering the fray” for Discovery and may even propose other mergers.

AT&T was founded in 1877 by Alexander Graham Bell, who was the first to obtain an American patent for the telephone. It is the largest telecom company in the world by revenue.