Oprah and CNN: AT&T is merging media business with Discovery

FILE - In this Oct. 21, 2014 file photo, people pass an AT&T store in New York's Times Square. AT&T will combine its media operations that include CNN HBO, TNT and TBS in a $43 billion deal with Discovery, the owner of lifestyle networks including the Food Network and HGTV.

The companies are essentially placing a $43 billion bet that they’ll still be in the mix when consumers decide how to spend their monthly entertainment budgets. Analysts say it also makes it imperative that services below that tier — think Paramount+ or Peacock — find some way to ramp up or risk being left behind.

“It either has something for everyone in the family, or is so diverse that it is hard to explain,” said Jim Nail, an analyst for Forrester Research. HBO Max and HBO have a combined global subscriber base of about 63.9 million, and Discovery+ has about 15 million subscribers. That compares with Netflix, which has more than 200 million subscribers worldwide, and Disney+, which counts over 100 million.

It’s the second time this year that AT&T has calved off a major acquisition as it navigates a rapidly evolving media landscape. In February, the company spun off satellite TV service DirecTV for a fraction of the $48.5 billion it paid in 2015.

Should two companies own all of our media and entertainment?

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