Exec: Expect more streaming deals after 'shocker' WarnerMedia, Discovery merger

Alexandra Canal
·Senior Reporter
2 min read
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WarnerMedia's (T) merger with Discovery (DISCA) is likely to spur more consolidation in a streaming industry that's becoming intensely competitive, sparking speculation about who might be next.

"There clearly will be more consolidation," Howard Owens, founder and co-CEO of media and production company Propagate Content, told Yahoo Finance in a recent interview.

"I think the world of content is now a global one and, for primarily the domestic standalone players, they will be forced to take a good look at what they're doing and what they mean on the global stage," he added.

Since news of the deal was first announced, many analysts have mulled potential moves from fellow competitors like Comcast (CMSA), ViacomCBS (VIAC) and even Google (GOOGL) and Facebook (FB) — which now face even more pressure to develop innovative, forward-looking strategies in a bid for streaming dominance.

Owens emphasized the same sentiment, underscoring that Netflix (NFLX), Amazon (AMZN) and Apple (AAPL) are all established players to beat.

"I think the consolidation will continue and it will be really interesting to see what happens to the broadcast networks, particularly CBS and NBC and their path forward," he added.

WarnerMedia, Discovery 'a real kind of shocker'

The WarnerMedia, Discovery pairing initially seemed like an off choice.

Owens, who's worked with both media giants, described the merger as "a real kind of shocker," given that "you couldn't think of two different cultures and two different ways of doing business."

WarnerMedia's HBO produces elevated, scripted content — from cultural success "Game of Thrones" to the more recent phenomenon "Mare of Easttown." That's a far cry from Discovery's "Dr. Pimple Popper" and "90 Day Fiancé," quirky shows with cult followings.

Furthermore, WarnerMedia generated $30.4 billion in revenue in 2020, compared to Discovery’s much smaller purse of just $10.7 billion.

But the deal allows WarnerMedia to the be the star of a shiny new media conglomerate — and Discovery is willing to pay the big bucks in order to deliver.

PASADENA, CA - FEBRUARY 12: President and CEO, Discovery David Zaslav speaks onstage during the Discovery, Inc. portion of the Discovery Communications Winter 2019 TCA Tour at the Langham Hotel on February 12, 2019 in Pasadena, California.
PASADENA, CA - FEBRUARY 12: President and CEO, Discovery David Zaslav speaks onstage during the Discovery, Inc. portion of the Discovery Communications Winter 2019 TCA Tour at the Langham Hotel on February 12, 2019 in Pasadena, California. (Amanda Edwards via Getty Images)

Discovery said it plans to spend $20 billion on content per year within the new deal — topping Netflix's $17 billion pledge and Disney's goal of $14 billion to $16 billion by 2024.

"You can never discount [Discovery CEO} David Zaslav from taking that big swing. He's a futuristic mogul and someone you always have to keep your eye on," Owens added.

Alexandra is a Producer & Entertainment Correspondent at Yahoo Finance. Follow her on Twitter @alliecanal8193

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