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May 17, 2021, 5:48 p.m. EDT

What the AT&T-Discovery deal means for streaming viewers, investors and employees

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By Associated Press

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AT&T and Discovery said the combination will save $3 billion annually that can be plowed into investments in content and its streaming service. That likely means layoffs when the departments are combined and restructured.

“Unquestionably there’s going to be some layoffs,” said CFRA analyst Tuna Amobi.

Since being acquired by AT&T, WarnerMedia has already been through two rounds of layoffs, including a 5% to 7% cut in November, about 1,000 jobs.

On the other hand, after being run by a company with little entertainment experience, being under the helm of an established media company could be a welcome change for WarnerMedia employees, Moody’s analyst Begley said.

“They will feel more of the traditional media culture back again,” he said.


Netflix still dominates the streaming-service sector, being the most established player with more than 200 million subscribers globally. Amazon and Disney+ round out the top three.

The WarnerMedia and Discovery combination could make it a “Big 4,'” of general entertainment streamers, said Tim Hanlon, CEO of consulting firm The Vertere Group.

“The belief is this combination is a legitimate possibility for these two streaming services to rise up into the top ‘must-have’ tier,” he said.

That will probably lead to more consolidation among the smaller players remaining, including NBCUniversal’s Peacock, ViacomCBS’ Paramount+ and others. There are about 150 to 200 niche streaming services in the U.S. alone, Hanlon said.

“I don’t think we’re done seeing deals yet, there’s plenty more consolidation in the streaming space to come,” Hanlon said.

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