Media companies looking to consolidate and destroy the competition
On Sunday evening, rumors began to circulate that AT&T was looking to spin off WarnerMedia. Monday morning it was official. WarnerMedia will be combined with Discovery to form a new standalone company. It was only three years ago when AT&T was so adamant about purchasing WarnerMedia and its extensive IP library for $85 Billion, that it entered a lengthy legal battle with the Justice Department under former President Donald Trump. AT&T had hoped that consumers would be lured to their services based on the strength of the WB library. AT&T has always been a communications company, only things that strengthen their end goal of subscriptions matter. What a difference three years make.
The WarnerMedia library consists of many high caliber IP including Batman, Harry Potter, and Game of Thrones. There is certainly a love for those properties and they can draw subscriptions. Unfortunately, HBO Max has not penetrated the streaming market the way AT&T originally envisioned.
It will take some time for this deal to come together, so don’t expect House Hunters Westeros edition anytime this year. Whether the companies keep Discovery+ and HBO Max apart or combine them into a bigger streaming service remains to be seen.
Julia Alexander from IGN has a detailed look into how the AT&T and WarnerMedia strategy never made sense and what this might mean in the future.
That wasn’t the only discussion of mergers this week.
By Monday afternoon, there was word that Amazon is seeking to acquire MGM for $8 billion. The biggest IP that MGM owns is the James Bond films. That series of films is considered one of the highest grossing franchises in movie history. In a media landscape where IP is everything, Bond would be a nice get for Amazon’s streaming service.
With so many competitors in the marketplace, it’s more important than ever to provide consumers with big properties. As I wrote recently, some services like Peacock, cater to consumers solely based on the strength of one big title (i.e. The Office). If Amazon could become the home of James Bond, that’s an enticing proposition. With new streaming services opening up everyday, there’s only so much money from consumers to go around. Right now everybody is trying to get some of those subscription dollars. Expect some of these services to fail and get swallowed back up into a bigger service like Amazon or Netflix. It’s only a matter of time.