Exciting Industry Shift: Warner Bros. Discovery to Split HBO and CNN into Two Distinct Entities

Warner Bros Discovery, the owner of CNN and HBO Max, is planning a major split. By mid-next year, the company will divide into two separate entities. One will focus on its studios and streaming services, while the other will handle traditional cable networks.

This decision comes as streaming continues to grow rapidly, pulling in millions of users worldwide. In contrast, cable TV has seen a steady decline in viewership over recent years. Popular HBO Max shows like Succession and The Last of Us have thrived, while CNN has struggled with its ratings.

The new streaming and studios division will include hit series and the film department, led by the company’s CEO, David Zaslav. The second entity, called Global Networks, will encompass CNN, Discovery, and TNT Sports, overseen by CFO Gunnar Wiedenfels.

Zaslav emphasized that the split aims to give these brands the focus they need to succeed in today’s media landscape. However, the stock market didn’t react positively to the news, with shares falling nearly 3% on the announcement and dropping over 10% this year.

Analysts like Peter Jankovskis of Arbor Financial Services believe this split could clarify each company’s value for investors. "Simplifying the business makes it easier for analysts to assess its worth," he noted.

CNN has recently faced challenges too. In the first quarter of this year, the network averaged just 558,000 viewers during primetime, a 6% decrease compared to last year. Earlier in January, CNN laid off over 200 employees to sharpen its focus on digital offerings.

On a brighter note, Warner Bros Discovery’s streaming service enjoyed a healthy growth, boasting over 122 million subscribers by the end of the first quarter.

This split reflects a broader trend in the media industry. Last year, Comcast announced a similar move, separating its NBCUniversal cable operations from its streaming service, Peacock. The competitive landscape is shifting, with many firms reevaluating how they structure their businesses to appeal to investors. The rise of streaming is pushing companies to create clearer boundaries between traditional and digital media.

Source link