Meanwhile, Warner Bros Discovery recently disclosed making a strategic pivot by separating its studio and streaming businesses from its legacy cable television programming networks. David Zaslav, the company’s president and chief executive, announced this change. Most importantly, it aims squarely at the changing face of the media industry — in particular, the explosive expansion of streaming services. As these platforms attract hundreds of millions of users worldwide, Warner Bros Discovery acknowledges the need for a strategic realignment.
The ongoing drop in audience figures for cable TV over the past few years has forced this change, sparking a stampede away from cable. The split is expected to conclude by mid-2024. This will enable both factions to hone laser focus on their respective submarkets. Warner Bros Discovery owns the biggest names in news and streaming — CNN and HBO Max. This separation will allow them to advance and operate strategically and with more clarity and purpose.
Despite this announcement though, Warner Bros Discovery shares fell almost 3% in Monday trading. Its parent company Meta’s stock is down more than 10% so far this year in a sign of persistent market headwinds. Analysts are watching these moves with baited breath, since this new strategic split comes on the heels of the mega-merger that created Warner Bros Discovery back in 2022.
Below, read Peter Jankovskis, an analyst at Arbor Financial Services, on what the split means. He noted that simplifying the business structure could lead to a clearer valuation for investors:
“We are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape.” – David Zaslav
Jankovskis highlighted the competitive nature of the current market, where many firms are attempting to better distinguish their streaming and content segments:
“When you make the business less complicated, analysts can go in and do a better job of determining what the business is actually worth.” – Peter Jankovskis
Jankovskis also highlighted the competitive nature of the current market, where many firms are attempting to better distinguish their streaming and content segments:
“It’s a very competitive market right now, so many firms are trying to segregate out the streaming portion or the content portion of their businesses so that the remaining business can be valued separately.” – Peter Jankovskis