Television

HBO Max, Discovery + Bundled After Warner Media Discovery Merger – Hollywood Reporter

Discovery CFO Gunnar Wiedenfels says Discovery and WarnerMedia megamergers (eventually a combination of Discovery + and HBO Max streaming services) are on track for closure in mid-2022.

In a webcast session, Wiedenfels said at Deutsche Bank’s annual media, internet and telecom conference, “We are currently completing the transaction in nine innings,” with HBO Max’s ability to acquire subscribers. Insisted on combining customers. Discovery + content retention should “lead to an explosive growth in DTC (Direct-to-Consumer) products and ensure very healthy revenue growth over the next few years.”

Wiedenfels will also discuss a direct sales strategy after the merger of AT & T’s Warner Bros. and Discovery, with Discovery + and HBO Max bundled early, and finally both streaming services integrated into one consumer service and platform. I did. In the meantime, we are working on an interim solution. That’s why we’re working on a bundle approach right outside the gate. Probably a single sign-on, “he said.

The goal is to get early benefits from the merger. “But the main goal is to harmonize the technology platform and build a combination of very powerful consumer products and platforms, which will take some time,” Wiedenfels added. .. ..

The Chief Financial Officer of Discovery said he had reached the most important milestone to complete the merger of Discovery and WarnerMedia. On Friday, Discovery’s shareholders officially approved a mega-combination of Facts and Lifestyle Media Powerhouse Discovery and AT & T’s Entertainment Division. The Mega Deal took place at a special shareholders meeting held online. AT & T shareholders, led by CEO John Stanky, do not need to vote for this combination.

Last month, the merger was approved by the US Department of Justice. This is a major regulatory hurdle to the merger, and the European Commission, the executive body of the European Union, approved the transaction in December.

In the big picture, AT & T will spin off WarnerMedia and integrate with Discovery, and AT & T shareholders will receive an estimated 0.24 shares of the new company for each AT & T stake held. AT & T shareholders will own 71% of the new Warner Bros. Discovery, the rest owned by Discovery shareholders.

While appearing at the Investor Conference, Wiedenfels returns to a theme familiar to the company, with the newly integrated Discovery and WarnerMedia entities aiming to become a free cash flow machine. We are bullish on our ability to drive free cash flow, dismantle the company very quickly, and grow free cash flow sustainably over the years to come, “he claimed. ..

Discovery’s CEO David Zaslav will run the merged giant, and Wiedenfels will be the CFO of the new company. Weedenfels said early cost savings could be achieved by reducing corporate overhead from the merger. It’s far from a merger.

The synergies of combining HBO Max and Discovery + take time to secure because you need to combine the product and technology stacks of both streaming services.

As Wall Street focuses on the profitability outlook for streaming services, executives recently vowed that the merged company will focus on streaming growth, but will not raise prices at all. Wiedenfels has promised a “conservative approach” to spending on streaming content. “We have a careful and wise plan,” Zaslav said, summarizing this approach as follows: “Our goal is not to win the spending war, but to compete with major streaming services.”

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