WarnerMedia and Discovery are merging, and the new company will immediately pose stiff competition to Netflix when it comes to content creation. Discovery CEO David Zaslav, who will lead the new company formed by the merger, stated during a press call (via AXIOS) that the post-merger entity would spend $20 billion on new content. That’s expected as it is about what WarnerMedia and Discovery combined spend on new content now. More Interestingly, that total is more than Netflix spent on new content last year ($17 billion). The comparison is emblematic of how disruptive this new company could be in the entertainment business, being second in size only to Disney and capable of competing with the “House of Mouse” and powerhouses like Netflix and NBCUniversal.
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The merged corporate entities will spread that total across the HBO Max and Discovery+ streaming services (assuming the new company doesn’t merge the two platforms), Warner Bros. Pictures, and the many cable networks the company will own. Those networks include Discovery Channel, the Food Network, HGTV, OWN, HBO, CNN, TLC, SCI, Animal Planet, Cartoon Network (including its nighttime Adult Swim block), HLN, Cinemax, Turner Sports, Magnolia Network, Investigative Discovery, Eurosport, TBS, and TNT.
There’s also DC Entertainment, the multimedia entity that revolves around DC Comics and its characters. Following the merger and recent layoffs at the company, fans are sure to have questions about the publisher’s future.
“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms,” AT&T CEO John Stankey said in a statement officially announcing the merger. “It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want. For AT&T shareholders, this is an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity. AT&T shareholders will retain their stake in our leading communications company that comes with an attractive dividend. Plus, they will get a stake in the new company, a global media leader that can build one of the top streaming platforms in the world.”
“During my many conversations with John, we always come back to the same simple and powerful strategic principle: these assets are better and more valuable together,” Zaslav added. “It is super exciting to combine such historic brands, world class journalism and iconic franchises under one roof and unlock so much value and opportunity. With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins…consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers. We will build a new chapter together with the creative and talented WarnerMedia team and these incredible assets built on a nearly 100-year legacy of the most wonderful storytelling in the world. That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it.”
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