Discovery and WarnerMedia Merge, as Streaming War Consolidation Heats Up

Sam Blake

Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

Discovery and WarnerMedia Merge, as Streaming War Consolidation Heats Up

AT&T has decided to shed its entertainment assets in exchange for $43 billion and intends to merge them with Discovery into a new entertainment company, the companies announced Monday. The deal, which is expected to close in mid-2022, will still need to be approved by regulators.

The new company will combine streaming services HBO Max, which falls under AT&T's WarnerMedia subsidiary, and Discovery Plus, into a publicly traded parent company that is yet to be named.


Together, the new company will control nearly 200,000 hours' worth of programming and will invest about $20 billion per year in making more, said David Zaslav, the Discovery boss who will run the new firm. That level of spending will outpace the current content investment plans of two of the new service's biggest competitors: Netflix (which plans to invest $17 billion per year) and Disney ($8 billion to $9 billion on Disney Plus and $14 billion to $16 billion across Hulu, Star and ESPN Plus).

Warner Media and Discovery

It is not yet clear the extent to which consumers will notice a change. Subscribers to HBO Max may receive a discount to Discovery Plus, and vice versa. Or a new service combining the companies' assets may yet launch. WarnerMedia's brands include HBO, TNT, TNN, CNN, Cartoon Network and Warner Bros Studio. Discovery's include HGTV, Food Network and Animal Planet.

Whether they are combined or remain separate, analysts say the content offerings of the two companies are complementary; Discovery's focus on reality television is an area where Warner's cupboard is relatively bare.

Among other implications, the move brings some foreseen consolidation to the streaming market. The nature of entertainment makes bundling content an economically advantageous strategy; that's partly why it's so hard for a niche streaming platform to succeed.

With over 200 million and 100 million subscribers respectively, Netflix and Disney have a big lead over a combination of HBO Max and Discovery Plus, which together serve around 60 million subscribers. Yet both of those leading platforms have been experiencing slowinggrowth and declining share prices following a banner 2020 that saw subscribers climb quickly amid the pandemic.

The merger will see some collateral damage ripple throughout the entertainment industry. In the announcement of the deal, the two companies boasted it would save the combined company $3 billion in "cost synergies" which, as with most mergers, will likely mean substantial amounts of people losing their jobs.

WarnerMedia's boss Jason Kilar is reportedly negotiating his exit. The former head of Hulu has become somewhat of a symbol of the move-fast-and-break-things approach to modernizing traditional entertainment, to the chagrin of many. Discovery's boss, David Zaslav, has been tapped to run the new company, according to the companies' statements.

Other players in the streaming market are also on notice. There are still likely more services in existence than consumers are willing to pay for, according to industry analysts.

Sony has seemingly committed to retaining its "arms dealer" strategy. NBCUniversal and ViacomCBS' platforms, Peacock and Paramount Plus, appear to have more ground to make up in a market that is even more competitive.

If the deal is approved, AT&T's shareholders would receive 71% worth of the new company's stock, with Discovery's shareholders receiving the remainder. The name of the new company is expected to be announced next week.

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The Impact of Authentic Storytelling. LA Latino/a Founders and Funders Tell All

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

The Impact of Authentic Storytelling. LA Latino/a Founders and Funders Tell All
Decerry Donato

As one of the most diverse cities in the world, Los Angeles is home to almost 5 million people who identify as Hispanic or Latinx. Yet, many feel they still lack representation in the city’s tech space.

“I can safely say that last year’s LA tech week hosted all of the events on the west side, and very few were focused on telling Latino and Latina entrepreneurial stories,” said Valeria Martinez, investor at VamosVentures. “We wanted to change that this year.”

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LA Tech Week Day 3: Social Highlights
Evan Xie

L.A. Tech Week has brought venture capitalists, founders and entrepreneurs from around the world to the California coast. With so many tech nerds in one place, it's easy to laugh, joke and reminisce about the future of tech in SoCal.

Here's what people are saying about day three of L.A. Tech Week on social:

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LA Tech Week: Female Founders Provide Insights Into Their Startup Journeys

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

LA Tech Week: Female Founders Provide Insights Into Their Startup Journeys
Decerry Donato

Women remain a minority among startup founders. According to Pitchbook, even though women-led startups in the United States received a record $20.8 billion in funding during the first half of 2022, U.S. companies with one or more female founders received less than 20% of total venture funding in 2022. U.S. companies solely led by female founders received less than 2% of the total funding.

The panel, titled Female Founders: Planning, Pivoting, Profiting, was moderated by NYU law professor Shivani Honwad and featured Anjali Kundra, co-founder of bar inventory software Partender; Montré Moore, co-founder of the Black-owned beauty startup AMP Beauty LA; Mia Pokriefka, co-founder and CEO of the interactive social media tool Huxly; and Sunny Wu, founder and CEO of fashion company LE ORA.

The panelists shared their advice and insights on starting and growing a business as a woman. They all acknowledged feeling pressure to not appear weak among peers, especially as a female founder. But this added weight only causes more stress that may lead to burnout.

“The mental health aspect of being a founder should not be overshadowed,” said Kundra, who realized this during the early stages of building her company with her brother..

Growing up in Silicon Valley, Kundra was surrounded by the startup culture where, “everyone is crushing it!” But she said that no one really opened up about the challenges of starting your own company. .

“Once you grow up as a founder in that environment, it's pretty toxic,” Kundra said. “I felt like I really wanted to be open and be able to go to our investors and tell them about challenges because businesses go up and down, markets go up and down and no company is perfect.”

Honwad, who advocates for women’s rights, emphasized the value of aligning yourself with people with similar values in the tech ecosystem. “[Those people] can make your life better not just from an investment and money standpoint, but also a personal standpoint, because life happens,” she said.

Moore, who unexpectedly lost one of her co-founders at AMP Beauty, said that entrepreneurs “really have to learn how to adapt to [their] circumstances.”

“She was young, healthy, vibrant and we've been sorority sisters and friends over the past decade,” she said about her co-founder Phyllicia Phillips, who passed away in February. “So it was just one of those moments where you have to take a pause.”

Moore said this experience forced her to ask for help, which many founders hesitate to do. She encouraged the audience to try and share their issues out loud with their teams because there are always people who will offer help. When Moore shared her concerns with her investors, they jumped in to support her in ways she didn’t think was possible.

Kundra said that while it is important to have a support group and listen to mentors, it is very important for entrepreneurs to follow their own thinking and pick and choose what they want to implement within their strategy. “At the end of the day, you really have to own your own decisions,” she said.

Kundra also said that while it is easy to turn to your colleagues and competitors and do what they are doing, you shouldn’t always follow them because every business is different.

“When I was in the heat of it, I kind of became [a part of] this echo chamber and that was really challenging for us,” Kundra added, “but we were able to move beyond it and figure out what worked for us [as a company] and we're still on a journey. You're always going to be figuring it out, so just know you're not alone.”

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