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 The telecom giant’s deal with
Discovery Inc, announced Monday, marks the
latest shift in the remaking of the media
industry and the potential beginning of another
round of consolidation. An earlier wave three
years ago resulted in media mogul Rupert Murdoch
leaving Hollywood and Viacom and CBS
recombining.
The deal combining Discovery with AT&T Inc's
WarnerMedia underscores the value of scale in
today’s media landscape, where industry leaders
Netflix Inc and Walt Disney Co are looking
outside the United States for growth.
Discovery brings a global footprint with its
pan-European television sports network Eurosport,
as well as a portfolio of broadcast channels
across Europe.
“The opportunities in direct-to-consumer
streaming are rapidly evolving, and to keep pace
and retain a leadership position several things
are required: global scale, access to capital, a
broad array of high-quality content and
industry-best talent,” said AT&T Chief Executive
John Stankey during a press call Monday morning.
The new company, with a name announced by next
week, will have over 200,000 hours of
programming and include 100 brands - from HBO to
Animal Planet to CNN and the Food Network. It
will include streaming services such as HBO Max
and Discovery+, which are growing, but still
significantly smaller than Netflix and Disney+.
HBO and HBO Max have 63.9 million global
subscribers. Discovery has 15 million global
streaming subscribers, most of them for
Discovery+. That compares to 103.6 million for
Disney+ and 207.6 million for Netflix.
ViacomCBS Inc and Comcast Corp could be feeling
pressure to consider bulking up, analysts said
on Monday, as the landscape is set to change
once again.
Rich Greenfield, a partner and analyst at
LightShed Partners, said in a note on Monday
that ViacomCBS was the only obvious potential
partner for Comcast, but its CBS network and
local news stations "are clear regulatory
problems."
DEAL FRENZY
Discovery’s global footprint will help
WarnerMedia’s international expansion once the
deal closes in mid-2022. HBO Max is scheduled to
launch in June in 30 territories across Latin
America and the Caribbean, and to roll out in
another 21 markets across Europe in the second
half of the year.
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 WarnerMedia has a number of
U.S. TV distribution rights, including deals
with Major League Baseball, the National
Basketball Association, the National Hockey
League and the N.C.A.A. through Turner Sports.
Discovery has broadcast rights in Europe for the
Olympic Games through 2024, among others.
The other opportunity is in news, Zaslav said,
where Discovery has recently invested in GB
News, a conservative-leaning channel in the
United Kingdom. Zaslav said the company intends
to be long-term owners of CNN and teased further
global expansion, mentioning Discovery's news
business in Poland.
“The direct-to-consumer momentum on both sides
will accelerate our ability to be one of the top
streaming companies in the world," said Zaslav.
The deal builds on the earlier round of
consolidation that saw Disney bulking up through
multiple transactions over many years: from its
2017 deal to buy Murdoch's Twenty-First Century
Fox Inc - which brought franchises like “Avatar”
and “The Simpsons” inside the company - to
previous purchases by then-CEO Bob Iger, which
included Pixar Animation Studios, Marvel
Entertainment and “Star Wars” producer Lucasfilm.
Those deals helped propel Disney’s launch of its
Disney+ streaming services in November 2019,
which quickly exceeded expectations, reaching 10
million sign-ups in its first day.
The 2019 merger of Viacom and CBS had a similar
intention, positioning the company to rebrand
its CBS All Access streaming service into
Paramount+, bolstered by content across the CBS
television network, CBS News and Showtime cable
networks with MTV Networks, Nickelodeon, Comedy
Central and the Paramount movie studios.
(Reporting by Helen Coster in New York.
Additional reporting by Sheila Dang in Dallas.
Editing by Kenneth Li and Lisa Shumaker)
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