Disney and Warner Bros Discovery have two of the largest media catalogs in the world. Now, they want to merge them together.
In a further step to consolidation of the entertainment industry, Disney and Warner Bros Discovery announced a bundle of their proprietary streaming services. The new offer, whose pricing and geographical availability remain undisclosed, will be launched in the summer.
Disney owns three streaming services: Disney+, Hulu, and ESPN+. Warner Bros Discovery, for its part, will add HBO Max and Discovery+ to the mix. Both companies also sit on a bottomless pit of legacy media and broadcasters, including companies like 20th Century Fox, CNN, ABC, Searchlight, Pixar, Marvel, and Warner Bros.
Customers will be able to access the bundle from any of the apps, which will remain separate. The bundle will come with both ad-free and ad-supported options.
Disney+, the world’s third-largest streaming service, surprised markets early this week by posting its first quarterly profit ever. The service generated $47 million in operating income, compared with $587 million in operating losses in the same quarter last year.
Warner Bros tried jumping in the streaming game with HBO Max, which has yet to yield a profit for the highly-indebted company.
Consolidating the two services is a way to stabilize revenues and extend profits for both parties. This will also improve customer experience as it will reduce the number of streaming apps. It will also decrease the pain of choosing what to watch in an endless sea of content, something many streaming customers lamented.
The end of the streaming wars
Hollywood giants tried to challenge Netflix’s global streaming dominance for years. So far, they have fallen short of their goal, with Netflix remaining the uncontested leader in the sector.
However, the streaming wars caused the entertainment market to consolidate. Warner Bros merged with Discovery, and there are talks for a new union coming in the following months. Paramount Global is also considering two merger offers and bundled its Paramount+ streaming platform with Showtime in late 2023.
As theater attendance fell in the United States as a result of last year’s Hollywood strikes, Hollywood majors find themselves in urgent need of cash.
Hollywood companies now realize a Netflix-like streaming model is unsustainable without its massive global presence. Netflix operates in 190 countries and often produces content locally for that specific market. Netflix achieved this position with years of aggressive expansion, which is only now bearing fruit.
Disney, Warner Bros Discovery, and Paramount cannot hope to compete with Netflix now. Their only hope is to replace the slowly decaying cable TV with a streaming alternative. But that needs consolidation, stability, and less rivalry between companies.
