WarnerMedia and Discovery announce merger
Three years after AT&T assumed control of Time Warner’s media and entertainment assets, they are calling it quits. On Monday, it was announced that AT&T will spin-off WarnerMedia and merge with Discovery as a new company, becoming one of the world’s largest combined entertainment companies as part of a reported $43B deal. Assuming regulatory approval, the merger is expected to close in mid-2022 bringing together many popular content brands from Warner Bros., HBO and CNN to Food Network, HGTV, Animal Planet and many more. The new company will be led by Discovery’s president and CEO, David Zaslav.
The NPD Take:
- The combined WarnerMedia and Discovery assets will provide opportunities for the new company to expand reach outside of their core audiences while becoming an even bigger streaming player.
- Additional mergers, divestitures and partnerships are likely as media companies try to find the right ‘fit’ and ‘scale’ in the new entertainment paradigm.
Amazon in discussion to purchase MGM
It has been reported that Amazon is considering acquiring the storied studio, MGM for a price tag of $9 billion. MGM has been on the selling block since December 2020. MGM has a deep content library of major franchises such as James Bond and Rocky, making it a prime acquisition prospect for video distributors looking to expand their library. Entertainment represents a small portion of Amazon’s overall business but the addition of Prime Video streaming to the Prime subscription helps to drive value and subscribe retention.
The NPD Take:
- MGM has been in the mix of acquisition chatter for many years. Adding the studio’s rich and historic content library to Amazon Studio’s portfolio can help bolster the content offering for the Prime Video service and facilitate increased engagement.
- As the major streaming services reach maturation and face increased competition, diversifying into adjacent entertainment categories such as theatrical distribution provide synergistic opportunities.
Verizon offering free SlingTV to customers
Verizon has reached a deal with vMVPD provider SlingTV to offer its mobile and broadband customers free live TV. Verizon customers who are not currently SlingTV subscribers can get two free months of the TV service. This deal is in addition to recent announcements of free subscriptions for customers to Disney+ and Discovery+.
The NPD Take:
- After years of trying to come up with their own media offerings, Telco’s are instead relying on partnerships to offer added value to their subscribers, increase ARPU and minimize churn.
- Notably, the Sling offering is a promotion and not an integration into Verizon Mix & Match as is competitor YouTube TV.