The merger would create a new entity of news, TV, and video content positioned to take on the likes of Netflix and Disney+

Less than three years ago, AT&T acquired media group Time Warner for around $85 billion, seeking to acquire video content to keep the pace with streaming giants like Netflix and Amazon Prime. Since then, the move to streaming over conventional television has become even more pronounced, with Disney+’s market entrance making competition even tougher. 

As a result, rumours suggest that AT&T is now in talks to merger their media business with Discovery.

AT&T’s media assets include news channel CNN and pay TV network HBO, while Discovery is the owner of lifestyle TV networks like HGTV and TLC. Both of these cable channels remain profitable in their own right, but are gradually losing subscribers as viewers move away from pay-TV and towards streaming platforms. 

The newly combined entity would be worth roughly $150 billion and would be led by Discovery’s CEO, David Zaslav. 

Since launching in late 2019, Disney+ has already garnered more than 100 million subscribers, while market leader Netflix claims around 207.6 million. By contrast, HBO and HBO Max have only 63.9 million global subscribers. Discovery, meanwhile, whose portfolio includes Animal Planet and the Discovery Channel, reaches around 88.3 million US homes, which could provide the merged entity with potential subscriber base needed to take on the streaming giants. 

In fact, earlier this year Discovery launched its own streaming service, Discovery+, but this has thus far only 15 million subscribers. 

While the scale of this deal is impressive, the move, like so often in the streaming sector, could well have come too late. Amazon, Netflix, and Disney+ are already well established and convincing customers to sign up to yet more services will be a tall order.

Meanwhile, AT&T is also in the midst of the expensive process of expanding 5G coverage across the country, having just spent $14 billion on C-band spectrum in the most recent auction. This merger with Discovery would go some way towards reducing the operator’s debts, potentially freeing them to accelerate their 5G rollout even further. 


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