AT&T and Discovery Are Reportedly in Talks to Combine Content to Take on Disney and Netflix

Illustration for article titled AT&T and Discovery Are Reportedly in Talks to Combine Content to Take on Disney and Netflix
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AT&T and Discovery Inc. may soon join forces to improve their chances against leading competitors like Netflix and Disney in the streaming wars. According to multiple reports, the two companies are in talks to merge Discovery’s reality TV empire with AT&T’s catalog of cable channels and other media holdings to create a new entertainment entity.

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AT&T and Discovery are in the advanced stages of negotiations and an agreement could be reached by Monday, sources told the Wall Street Journal on Sunday. So far, the companies have discussed several major players in AT&T’s WarnerMedia division, including CNN and its TNT and TBS cable channels. If they make a deal, AT&T shareholders would own a big stake in the new entity, according to the outlet. People familiar with the negotiations told Bloomberg a deal could be announced as soon as this week.

Tipsters that spoke with both outlets didn’t reveal terms of a potential deal and cautioned that these talks could still fall apart before an agreement is reached. Both AT&T and Discovery have declined to comment on the matter.

One thing’s for sure, the two certainly have enough content to market a joint venture. AT&T’s cable empire includes CNN, HBO, Cartoon Network, TruTV, and Cinemax, among others, along with the movie roster of Warner Bros. studio. Meanwhile, Discovery’s offerings include Food Network, TLC, and HGTV—some of the most binge-worthy trash TV that cable has to offer (and I say that affectionately).

AT&T’s existing streaming channel, HBO Max, has steadily gained subscribers since its debut last May despite its chaotic rollout, but it hasn’t seen the same explosive growth as Disney+ did in its first year. Discovery’s streaming service, Discovery+, is also fairly new on the scene, and both face steep competition from long-established services like Netflix. So teaming up could certainly give them an edge.

On the other hand, AT&T could be shooting itself in the foot here. It already plans to roll out a cheaper, ad-supported tier of HBO Max in June, which could deter existing subscribers from sticking with their more expensive plan. If people can also watch their favorite WarnerMedia programming on another streaming service like Discovery+, that’s one more reason for them to quit paying full price for HBO Max. It’s like AT&T is determined to undermine its own sales pitch.

Writes for Gizmodo on evenings and weekends.

DISCUSSION

brianka83
Brian_KA

I have had enough of the streaming wars.

I remember a few years ago, you could find the Harry Potter movies on a couple different streaming platforms. But then HBO Max came along and Harry Potter, being a Warner Bros franchise, was granted exclusive streaming rights of those movies. Fast forward to a couple weeks ago, and I got an email from Peacock saying that they now have those movies’ exclusive streaming rights; they are no longer on HBO Max. So is this the new normal? Will popular movies just bounce around between multiple $10/month streaming services forever?

I’m old enough to remember when Netflix was $5 per month, Hulu was free with ads, and they had pretty much everything under that umbrella. Nowadays you need a subscription to Netflix, Hulu, Disney+, Amazon Prime, Peacock, Apple+, Paramount+, Discovery+, and a couple others for around $10/each. Sometimes it makes me want to go back to cable.