Spin-offs and M&As: inside the great streaming platform war
Where do WarnerMedia’s merger with the Discovery channel and Jeff Bezos’s bid to buy MGM leave users?
In 2018 US phone company AT&T spent $85bn (now about R1,2-trillion) and fought off a government antitrust challenge to buy Time Warner, the owners of Warner Bros, CNN and HBO.
Since then WarnerMedia has grown to include HBO’s streaming service HBO Max and the sports-heavy cable services TBS and TNT, but in the popular and lucrative world of streaming, and in spite of spending billions on HBO Max, which has about 20 million subscribers, the company has been struggling to compete against streaming giants such as Netflix and Disney+.
On Monday, in a move that many see as an attempt by AT&T to cut its losses from the 2018 deal, WarnerMedia announced it will form a separate spin-off business by merging with the Discovery channel in a deal that will see AT&T make $43bn (about R600bn) and take a 71% stake in the new business, which it is hoped will enable the two companies to compete against Netflix, Disney+ and Amazon Prime Video for a bigger slice of the streaming pie...