“Netflix won this several years ago,” he told CNBC, when addressing streaming. “They’re the only ones that have the scale and momentum to keep making these somewhat lunatic investments in programming.”
His opinion concurs with other media analysts.
While WarnerMedia is better in the hands of longtime TV executive David Zaslav, president/CEO of Discovery Inc. than less effective AT&T executives lacking entertainment expertise, the road ahead is rocky.
Brian Wieser, president of business intelligence for GroupM Global, says though Discovery executives will be aggressive in pursuing a consumer-focused approach that started under WarnerMedia CEO, Jason Kilar, “history suggests this will not occur. Whatever the path forward, for now, the transaction seems likely to freeze the progress that Warner Media has made in establishing its business as a disruptive force in the industry.”
In short, any hesitation could mean big trouble.
He says Discovery’s history has been -- like other media companies -- focused on near-term cash flow efforts and financial returns to shareholders. “This is among the reasons why their primary streaming service Discovery+ has had only limited potential.”
The bigger-scripted TV and movie content business could be a boost to the narrower-targeting unscripted world of Discovery Inc.'s content.
But Wieser says even Discovery’s own description of itself is modest, which he calls “a relatively low-cost offering to a ‘mini-van’ relative to its competitors’ more premium ‘sports cars.’ Our guess is that most consumers probably prefer sports cars over mini-vans when given the choice.”
Discovery would need to rethink its modest ways quickly to compete in a bigger entertainment world.
Discovery had never over spent on content. It’s been proud of that fact. But now, it touts the two combined companies -- Discovery and WarnerMedia -- which will spend a collective $20 billion in content this year.
Can it really get on board with that and keep up with what Diller calls the “lunatic”-like Netflix content spending levels? We’re waiting for more crazy.