AT&T's WarnerMedia merging with Discovery in $43B deal to form new streaming service

Posted:
in iPod + iTunes + AppleTV edited May 2021
AT&T is spinning off its remaining WarnerMedia services to create a new streaming service together with Discovery, to compete with Netflix, Apple TV+, and other omnibus streaming services.

AT&T's WarnerMedia is merging with Discovery to create a new streaming service
AT&T's WarnerMedia is merging with Discovery to create a new streaming service


As previously rumored, AT&T has announced that it and Discovery, Inc, will create a new standalone streaming media company. It will include from the services AT&T acquired from Time Warner in 2018.

According to CNN, the new and as-yet-untitled service will contain HBO Max, Discovery+, and CNN itself. HBO Max is also reportedly planning to use Discovery's international business to help it expand outside the US.

"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," said AT&T CEO John Stankey in a statement.

"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," he continued.

The new service will be run by Discovery's CEO David Zaslav, who oversaw the launch of non-fiction streaming utilizing popular channels TLC and Animal Planet. The spinoff is being described as a joint venture, with Zaslav working with "executives from both companies."

However, if the deal gains regulatory approval, it will mean AT&T getting to reduce the amount of debt it has been carrying. "AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia's retention of certain debt," said the companies in a press release.

Shares of both AT&T and Discovery rose on the announcement.

The news follows AT&T's early 2021 revision of its media services. It closed down its previous AT&T TV Now service, and moved subscribers over to its separate AT&T TV platform.

Stay on top of all Apple news right from your HomePod. Say, "Hey, Siri, play AppleInsider," and you'll get latest AppleInsider Podcast. Or ask your HomePod mini for "AppleInsider Daily" instead and you'll hear a fast update direct from our news team. And, if you're interested in Apple-centric home automation, say "Hey, Siri, play HomeKit Insider," and you'll be listening to our newest specialized podcast in moments.

Comments

  • Reply 1 of 16
    MacProMacPro Posts: 19,523member
    Wow, I'll sleep better knowing that.

    Joking aside, I am retired and I don't have nearly enough time for our current options; Netflix, Disney Plus/Hulu, and Amazon Prime.

    How about the ability in something like the Apple TV app to pick a selection from any streaming service à la carte at a good price of something like $15 a month for any ten shows, from anywhere?
    omasou
  • Reply 2 of 16
    lkrupplkrupp Posts: 10,326member
    MacPro said:
    Wow, I'll sleep better knowing that.

    Joking aside, I am retired and I don't have nearly enough time for our current options; Netflix, Disney Plus/Hulu, and Amazon Prime.

    How about the ability in something like the Apple TV app to pick a selection from any streaming service à la carte at a good price of something like $15 a month for any ten shows, from anywhere?
    It’s nice to dream about but the logistics of such a service would be nightmare of licensing, contracts, fees, etc. We keep hoping for cheap access to programming but that’s not the goal of the content providers. Cord cutting, once the darling of the a la cart crowd, is looking more and more expensive than a cable/satellite subscription when you add up all the $10/mo fees for content you want. Then add in the cost of broadband internet service to be able to stream 4K and you are closer than ever to that $120/mo cable package we have railed against. 
    Beats
  • Reply 3 of 16
    lkrupplkrupp Posts: 10,326member
    As a former AT&T employee I can tell you that there was much disgust and distrust for the former CEO, Randall (don’t you call me Randy) Stephenson. This is the guy that fucked up the attempted acquisition of T-Mobile 2011. He got a slap on the wrist and a temporary reduction of salary from the board. He’s also the one who did the deal to buy Time Warner media in 2016 for $85 billion (completed in 2018), which many analysts thought was a bad idea. Now the new CEO, John Stankey, is spinning off Warner Media after just three years.

    But Randall is living it up with his retirement package and golden parachute. Go figure.
    Beats
  • Reply 4 of 16
    sdw2001sdw2001 Posts: 17,929member
    Like most I'm really just concerned about what this means....for me.   :p

    I get HBO Max free through my ATT cell service.  We also recently subscribed to Discovery+ (gotta make the wife happy).  Maybe they become one service?  Here's hoping.  
  • Reply 5 of 16
    mike1mike1 Posts: 3,133member
    I guess this will soon mean the end of HBO Max being included with my AT&T service.
  • Reply 6 of 16
    mike1 said:
    I guess this will soon mean the end of HBO Max being included with my AT&T service.
    Not necessarily. Verizon + T-Mobile both include streaming services with certain tiers of cellular service.
     There’s no chance AT&T will offer *nothing*, although I suppose there’s chance they might eventually offer a different service.
  • Reply 7 of 16
    ITGUYINSDITGUYINSD Posts: 448member
    lkrupp said:
    MacPro said:
    Wow, I'll sleep better knowing that.

    Joking aside, I am retired and I don't have nearly enough time for our current options; Netflix, Disney Plus/Hulu, and Amazon Prime.

    How about the ability in something like the Apple TV app to pick a selection from any streaming service à la carte at a good price of something like $15 a month for any ten shows, from anywhere?
    It’s nice to dream about but the logistics of such a service would be nightmare of licensing, contracts, fees, etc. We keep hoping for cheap access to programming but that’s not the goal of the content providers. Cord cutting, once the darling of the a la cart crowd, is looking more and more expensive than a cable/satellite subscription when you add up all the $10/mo fees for content you want. Then add in the cost of broadband internet service to be able to stream 4K and you are closer than ever to that $120/mo cable package we have railed against. 
    Broadband internet service is not exclusive to wanting to watch TV.  Nearly every house in America (including those with CableTV) already has it whether they stream or not.

    What irritates me, though, is when the streaming services that I am PAYING FOR (like Discovery+) do not include current season/episodes of programs.  Like, what am I paying for if I have to go watch them on cable TV with ads?
    edited May 2021 Beats
  • Reply 8 of 16
    thttht Posts: 4,720member
    Hmm, wonder what this is going to do with my "lifetime" HBO Max subscription as part of my ATT Fiber deal? It's always the lifetime of the company policy they are talking about, not my lifetime, isn't it? They just intimate that it's your lifetime.
    Beats
  • Reply 9 of 16
    lkrupp said:
    As a former AT&T employee I can tell you that there was much disgust and distrust for the former CEO, Randall (don’t you call me Randy) Stephenson. This is the guy that fucked up the attempted acquisition of T-Mobile 2011. He got a slap on the wrist and a temporary reduction of salary from the board. He’s also the one who did the deal to buy Time Warner media in 2016 for $85 billion (completed in 2018), which many analysts thought was a bad idea. Now the new CEO, John Stankey, is spinning off Warner Media after just three years.

    But Randall is living it up with his retirement package and golden parachute. Go figure.
    Don’t forget the Directv purchase. AT&T just unloaded Directv, after buying high and selling low. AT&T bought it right when cord-cutting was on the rise and net subscriber losses were increasing. 
  • Reply 10 of 16
    lkrupp said:
    MacPro said:
    Wow, I'll sleep better knowing that.

    Joking aside, I am retired and I don't have nearly enough time for our current options; Netflix, Disney Plus/Hulu, and Amazon Prime.

    How about the ability in something like the Apple TV app to pick a selection from any streaming service à la carte at a good price of something like $15 a month for any ten shows, from anywhere?
    Cord cutting, once the darling of the a la cart crowd, is looking more and more expensive than a cable/satellite subscription when you add up all the $10/mo fees for content you want.
    One of the techniques used is to cancel service with one streaming service and rotate to another (eg, cancel HBOMax and start Discovery+), then binge it for 30 days. After a month, cancel it and rotate to a different service (eg, Disney+). 

    This way, a series rolled out over several weeks, like WandaVision, is complete and ready to be watched in its entirety. Meanwhile, only one service is being paid for any given month. Since all of these services work without a contract, the customer can move in and out at will. 
  • Reply 11 of 16
    ITGUYINSD said:
    lkrupp said:
    MacPro said:
    Wow, I'll sleep better knowing that.

    Joking aside, I am retired and I don't have nearly enough time for our current options; Netflix, Disney Plus/Hulu, and Amazon Prime.

    How about the ability in something like the Apple TV app to pick a selection from any streaming service à la carte at a good price of something like $15 a month for any ten shows, from anywhere?
    It’s nice to dream about but the logistics of such a service would be nightmare of licensing, contracts, fees, etc. We keep hoping for cheap access to programming but that’s not the goal of the content providers. Cord cutting, once the darling of the a la cart crowd, is looking more and more expensive than a cable/satellite subscription when you add up all the $10/mo fees for content you want. Then add in the cost of broadband internet service to be able to stream 4K and you are closer than ever to that $120/mo cable package we have railed against. 
    Broadband internet service is not exclusive to wanting to watch TV.  Nearly every house in America (including those with CableTV) already has it whether they stream or not.

    What irritates me, though, is when the streaming services that I am PAYING FOR (like Discovery+) do not include current season/episodes of programs.  Like, what am I paying for if I have to go watch them on cable TV with ads?
    Discovery Networks has very lucrative deals with cable providers. If current shows were made immediately available, then you wouldn’t need to subscribe to cable, which means the Discovery Network services would immediately be worth a fraction of worth now to cable companies as an enticement to subscribe. 

    It doesn’t figure Discovery Networks would make up for the lost fees from cable companies—where it receives a fee of several $ per subscriber, regardless of whether that subscriber watches the channel—I pay for Lifetime Television, E!, MTV and many other channels I never watch—and get income ONLY from those who want Discovery+ at $5/month. DN would lose massive revenue to go strictly direct subscription. 
  • Reply 12 of 16
    apple1991apple1991 Posts: 31member
    looking forward to hbo discovery plus max
    tenthousandthings
  • Reply 13 of 16
    omasouomasou Posts: 410member
    lkrupp said:
    MacPro said:
    Wow, I'll sleep better knowing that.

    Joking aside, I am retired and I don't have nearly enough time for our current options; Netflix, Disney Plus/Hulu, and Amazon Prime.

    How about the ability in something like the Apple TV app to pick a selection from any streaming service à la carte at a good price of something like $15 a month for any ten shows, from anywhere?
    It’s nice to dream about but the logistics of such a service would be nightmare of licensing, contracts, fees, etc. We keep hoping for cheap access to programming but that’s not the goal of the content providers. Cord cutting, once the darling of the a la cart crowd, is looking more and more expensive than a cable/satellite subscription when you add up all the $10/mo fees for content you want. Then add in the cost of broadband internet service to be able to stream 4K and you are closer than ever to that $120/mo cable package we have railed against. 
    @MacPro had a great idea. It would be no more difficult than paying royalties like they do for songs on iTunes, Spotify, etc. Probably the same idea the Steve Job's propose but the content providers refused b/c they were afraid of the iTunes model.

    As content contracts are starting to expire or come up for negotiation (my guess?) which are the root cause of the streaming service problem mentioned by @ITGUYINSD. We will slowly transitioning away from the large "provider" packages to either the subscriptions models for shows we want, which is an expensive ala cart options or to buying streaming services + free streaming services. Once the "providers" become only ISP and loose their content the next move will be exactly what @MacPro suggested b/c subscriptions are too expensive and so is purchasing all the streaming services. We're already seeing consolidation in the streaming services, CBS All Access -> Paramount (shame I have seen all their content and I don't care about the new content except for a few shows but not they worth the $9.99/mo and now AT&T (+ DirectTV + HBO) and Discovery, which for me is the opposite, I like the new content. This is starting to cause new consumer behaviors. Like one or two shows but the subscription or plan cost too much. Fine, wait for all the shows to drop. Subscribe for a month. Binge watch what you want. Then cancel subscription until next year. It's a PITA way to view content, waiting and playing w/subscriptions but it saves ~ 11 months of fees per streaming service, which adds up quickly.

    As for cost, I pay less than the $120/mo ($79/mo for 1GB internet and a couple of streaming services. One HBO Max is included with my AT&T cell plan and Amazon Prime is included w/my Amazon shipping. So it's hard to make direct comparisons. The problem is the "packages" aren't even close $120/mo they are closer to $180+/mo and what do I get? A landline, I don't need it. A ton of useless channels, I don't watch them. Provider ala cart is/was a joke. The only thing their version of pick your own channels showed us was that it was less expensive to buy a "package" and ignore what we didn't want.

    Problem w/provider packages...
    • I don't want sports but it's include in the "packages" as is the sport licensing fee or whatever it is called.
    • I don't want to rent a TV box, card, etc. and they add to the bill quickly. <- This is how streaming services and apps are gaining a foothold b/c I don't need to RENT a box.
    • I WANT a single remote. I finally have that w/my latest Sony TV, it works with all the apps including Apple TV.

    "Providers" don't get it, their marketing goals are to increase profits and they are failing. Instead they are slowly becoming ISPs and WE are getting our content where and how we like. Next/eventually we will have competition for ISPs beyond Verizon, AT&T and Comcast b/c we will not be limited by the "providers" fiber to the house controlling the last mile and they will be fighting to survive.
    edited May 2021
  • Reply 14 of 16
    22july201322july2013 Posts: 3,219member
    Warner and all the other movie companies make 65% of their income from outside the USA, and that number has been going up by 1% per year for 30 years. In fact, Discovery Channel's own subscribers are 79% outside the US and only 21% American.

    When these companies are thinking of merging, they are barely even considering American issues. They are thinking internationally. Perhaps some media companies will move their HQ outside of the US to reflect their customers better (and save money on cheap wages.)
    edited May 2021
  • Reply 15 of 16
    davgregdavgreg Posts: 995member
    I am not sure this deal will get regulatory approval.

    There have to be quite a few sign offs and nothing is guaranteed.

    I have no doubt that AT&T will divest Warner, but it may be sold off in parts. AT&T is the most deeply indebted non-bank corporation in the US and they need to spend billions to build out AT&T Fiber and 5G Wireless.
  • Reply 16 of 16
    sdw2001sdw2001 Posts: 17,929member
    mike1 said:
    I guess this will soon mean the end of HBO Max being included with my AT&T service.
    Yeah I was excited until I started thinking about that.  Then again, we now have Discovery+, so perhaps it will be included.  
Sign In or Register to comment.