Warner Bros Discovery Inc.: A Game Changer in the Global Streaming Space?
| Case Code: BSTR659
Case Length: 18 Pages
Pub Date: 2023
Teaching Note: Available
Organization : WarnerMedia Discovery Inc.
Industry : -
Countries : United States
Themes: M&A, Brand Strategy, Core CompetenceCompetitive Strategy
Abstract Case Intro 1 Case Intro 2 Excerpts
Discovery traced its roots back to 1982, when a University of Alabama history graduate named John Hendricks founded the Cable Educational Network, Inc. in Maryland. The company’s goal was to help present informational and documentary programming on television. In 1985, after raising US$5 million, the company launched a new cable television network, which was named the Discovery Channel. By 1988, Discovery’s subscriber base had hit 32 million..
Global OTT Market
The number of pay TV households in the US had been steadily decreasing since 2015 due to high prices and subpar customer service. In 2020, about 6 million households cut the cord in the US bringing the total number of cord cutter households to 31.2 million..
Rationale Behind The Merger
When AT&T acquired Time Warner in 2018, it planned to create a media and telecom giant by combining WarnerMedia’s content with AT&T’s strengths in direct-to-consumer distribution. The idea was to vertically integrate entertainment with its telecom services and grow its content business..
The new company would compete globally in the fast-growing DTC market — bringing exciting content to subscribers across its portfolio. According to Zaslav, WBD would bring together the strongest leadership teams, content creators, and high-quality series and film libraries in the media business..
According to analysts, some key challenges before Zaslav were to attract customers globally as WBD was a late entrant into the intensively competitive global streaming space, successfully maximize the value of the merger and to ensure that the merged entity achieved the projected synergies and emerged..
Exhibit I: Business Divisions of WarnerMedia
Exhibit II: Discovery Inc: Consolidated Statements of Operations
Exhibit III: Discovery, Inc.: Business Divisions and Networks
Exhibit IV: US Cord-Cutter Households (2019-2024)
Exhibit V: Global Streaming Video Subscriptions
Exhibit VI: US Streaming Market Share (2020 vs 2021)
Exhibit VII: Top Global Streaming Services Based on Subscriber Base (April 2021-April 2022)
Exhibit VIII: Consolidated Statement of Income of AT&T (FY 2016 to FY 2021)
Exhibit IX: AT&T’s WarnerMedia Segment Financial Results (FY 2019 to FY 2021)
Exhibit X: Warner Bros+Discovery Brand Mashup
Exhibit XI: WBD: Total DTC Subscribers
Exhibit XII: WBD’s Consolidated Statements of Operations
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