US teleco, media co merge operations in streamlining deal worth Rs6.57 tr

NEW YORK: American multinational conglomerate holding company AT&T and Discovery Inc will merge their media operations in a $43 billion (Rs6.57 tr) deal that will create a new company overseeing CNN, HBO, TNT and TBS, along with Discovery’s Food Network, HGTV and others, foreign media reported.

With the agreement Monday to spin off WarnerMedia, AT&T is pulling back from a years long campaign to break into the streaming and entertainment sector, where big players are slugging it out with increasingly large war chests dedicated to premium and original content.

That arena that has been flooded in the past two years with new players including those owned by AT&T and Discovery, which operate HBO Max and Discovery+, respectively. The new company will compete directly with Netflix, Amazon, Apple, Disney and Comcast, which are assembling a growing arsenal of original media content.

It is a major directional shift for AT&T, which squared off with the Justice Department less than three years ago in an antitrust fight as it acquired Time Warner Inc. for more than $80 billion. Now AT&T will shift its focus back to telecoms.

It’s not immediately clear what the new company will mean for customers, but it will likely allow the bundling of streaming services. For example, Disney offers its viewers Disney+, Hulu and ESPN. A standalone streaming service for CNN is also a possibility.

The combined media company will still be smaller than rival streaming services. HBO Max and HBO have a combined global subscriber base of about 63.9 million, and Discovery+ has about 15 million subscribers. That compares with Netflix, which has more than 200 million subscribers worldwide, and Disney+, which counts over 100 million.