Caplok Discovery, AT&T Increasingly Muscled in the Streaming Business

Jakarta, Selular.ID – US telecom giant AT&T is approaching a deal to merge media assets, including CNN and HBO, with Discovery, owner of lifestyle TV networks such as HGTV and TLC. As reported by Bloomberg, the second agreement can be announced this weekend.

The merger between the two giants marks the cancellation of AT&T’s $ 108.7 billion acquisition of US media conglomerate Time Warner in 2018. The acquisition of Discovery also further strengthens AT&T in the streaming business that is the future of the broadcast industry. The digital age is increasingly pushing TV viewers to turn to streaming, where scale is needed to take the likes of Netflix and Walt Disney.

According to the Financial Times, the merger would create a new company separate from AT&T that could be worth $ 150 billion, including debt. Discovery currently has a market value including debt of approximately $ 30 billion.

The deal will bring together one of the most powerful studios in Hollywood, home to the Harry Potter and Batman franchises, with the Discovery production house comprising of unscripted house shows, cooking, and nature and science.

Prior to its acquisition of Time Warner, AT&T sought to create a media and telecommunications platform that combines content and distribution. But it was a costly move because simultaneously, the company was trying to expand its next-generation wireless service, forcing AT&T to borrow $ 14 billion in funds to buy more wireless spectrum.

AT&T has been trying to break away from debt-laden acquisitions and lighten its balance sheet. In February, they agreed to sell a third of DirecTV’s satellite TV service, which it bought in 2015 for about $ 68 billion to TPG Capital in a deal that valued the business for $ 16.25 billion.

Currently, AT&T-controlled HBO and HBO Max have 63.9 million global subscribers. Lagging behind in comparison with more than 100 million for Disney + Walt Disney and 207.6 million for Netflix. Meanwhile, Discovery, with a portfolio that includes Animal Planet and Discovery Channel, reaches 88.3 million homes in the United States. The Discovery + streaming service, which was launched in January, already has 15 million subscribers.

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