WarnerMedia and Discovery Merger: What It Means for HBO Max, discovery+, CNN+

Nearly a year after a merger was initially announced, it has now become official that WarnerMedia and Discovery have become Warner Bros. Discovery. AT&T sold WarnerMedia as part of its ongoing efforts to get out of the TV-making business. The newly formed company instantly becomes one of the most powerful and far-reaching brands in entertainment as some of the most popular scripted and unscripted series — not to mention news programs, motion pictures, documentaries, and more — have come under one umbrella.

From a content perspective, WarnerMedia brings with it the 99-year history of Warner Bros. Pictures, HBO, CNN, TNT, TBS, TruTV, and DC Comics, while Discovery has its namesake channel and Animal Planet, HGTV, Magnolia Network, OWN, TLC, and Travel Channel.

On the streaming side of the content equation, the new Warner Bros. Discovery has three distinct services… at least for now. From WarnerMedia, they have the ever-growing prestige cable spinoff HBO Max and the fledgling (and perhaps floundering) cable news supplement CNN+; while Discovery brings their collection of cooking and baking, home renovation, ghost hunting, true crime, and married-at-first-sight reality shows via discovery+.

Despite all of this content — and all of the money associated with it — the future of the consolidated company is still very much up in the air. So, we will venture to answer some of the questions from the streaming perspective as best as we can.

Will HBO Max, discovery+, and/or CNN+ Be Bundled or Merged?

Eventually, yes. Last month, Discovery CFO Gunnar Wiedenfels said that HBO Max and discovery+ would initially be bundled and then eventually merged. There was no timeline given as to when this would happen, but it is likely that the bundling happens relatively soon, while customers might have to wait a little while for the combined platform to roll out.

Given our recent conversation with HBO Max’s EVP for Global Product Management Sarah Lyons, it is clear that the streamer takes the performance of its service very seriously. So, whether or not the migration of discovery+ content to HBO Max — or vice versa — is something that can be done quickly is yet to be determined.

Another under-discussed WarnerMedia asset that it is bringing to the table is You.i, a company that helps companies deliver video content across mobile, tablet, game consoles, streaming devices, set-top boxes, and Smart TVs. As HBO Max migrated its service from the remnants of HBO GO to their new tech stack, they did it on You.i technology.

Whether all Warner Bros. Discovery streaming services will eventually use the same services or not is still unclear.

As for the third service in this streaming triumvirate, as of now, CNN+ is on the outside looking in when it comes to the proposed combined service. Since the news streamer is still in its first few weeks of operation, the new executives for Warner Bros. Discovery are likely giving it some time to get its footing before ultimately deciding on its fate. While the initial reaction to the service’s launch has been tepid at best, the WarnerMedia executives behind the move believe that as cable subscriptions become less and less important to American consumers, having an established streaming brand will become increasingly vital.

While Fox Nation beat CNN+ to market and MSNBC has started providing programming to Peacock, it seems like all of the cable news networks are convinced that streaming is the future of their business. While it is still unclear whether or not CNN+ will be folded into either HBO Max or an eventual, unified platform, the executives at CNN are at least interested in bundling options.

Ahead of CNN+’s launch last month, CNN’s Chief Technology Officer Robyn Peterson told The Streamable that they would be very excited to be a part of future bundling promotions.

One final unknown is what a merged service might be called. HBO and Discovery are two very strong names, so would the company risk losing either in the title? Or are we looking at some monstrous hybrid name like HBO Discovery Max+?

What Will This Mean for My Favorite Content?

As of now, there’s no reason to believe that any of your favorite HBO, Discovery, or CNN programming will disappear. However, where it gets housed and — more importantly — what gets made moving forward is very much up in the air.

On Thursday, Discovery announced the majority of the leadership team that will lead WarnerMedia Discovery and, unsurprisingly, it is mostly made up of executives from the Discovery side of the company.

A few notable exceptions are on the content front as Casey Bloys will maintain oversight of HBO and HBO Max, Channing Dungey will continue as Chairman of Warner Bros. Television Group, Toby Emmerich will remain the Chairman of Warner Bros. Pictures Group. While these individuals will be responsible for getting things made in their individual content silos, the people that they will now report to seem to have a very different view of the company’s future than their previous boss did.

Earlier this year, Discovery CEO David Zaslav (who will become the CEO of Warner Bros. Discovery) said, “Our goal is to compete with the leading streaming services, not to win the spending war.”

He explained that he is not sure that adding more and more content to a streaming service delivers much return on investment. He argues that at some point, streamers will hit the downside of the rate of diminishing returns to where adding more content — even if it is well received by audiences — won’t do much to move the financial needle for companies.

“If you look at what Casey (Bloys) is doing with HBO, he has ‘Euphoria’ and had ‘Succession’ and has period drama ‘The Gilded Age,’” Zaslav said. “Would HBO be doing a lot better if it had three more really successful scripted series right now? It’s not clear.”

He brought it home to his own company, explaining, “If you say we do 600 hours on Food Network and they like it and we make $400 million, for example, if we did another 400 hours of content, maybe audiences would be a little happier, but we would make no money.”

While I wouldn’t anticipate much change on the Discovery side of the operation, these comments do raise questions about what to expect moving forward from HBO and HBO Max. It sounds like Zaslav is in favor of sticking to a smaller number of tentpole properties, rather than having a platform that has something unique for everybody. Does that mean that HBO Max will be forced to trim its future plans and reaccess the types of projects that it undertakes? We will have to wait and see.

One interesting thing that we do know is that despite its long history with Discovery, the Chip and Joanna Gaines co-owned Magnolia Network will fall under Bloys' oversight in the newly reconfigured company. There is no indication yet as to whether this means that the former DiY Network will migrate from discovery+ to HBO Max, but it could provide an insight as to how Zaslav sees the future for HBO.

What Does This Mean for Streaming Sports?

Thanks to WarnerMedia’s ownership of the Turner Networks, Warner Bros. Discovery now comes into possession of a substantial amount of live sports rights. As of now, HBO Max has yet to broadcast any live sports in the U.S., despite owning some streaming rights to the NHL, but the service does broadcast live international soccer in Latin America.

Also, earlier this year, Turner won rights to the men's and women's US National Soccer teams with the plans to broadcast some games on HBO Max. When you mix in Turner’s NBA and MLB broadcast rights, there are now a lot of options for Zaslav and company to consider.