Discovery WarnerMedia Merger Means More Content, Less Spending
By Movieguide® Contributor
As Discovery and WarnerMedia continue their merger process, executives assured investors that they will not overspend on content.
“Our goal is to compete with the leading streaming services, not to win the spending war,” Discovery CEO David Zaslav told Deadline.
The concerns about overspending come after lower-than-projected streaming numbers spooked Wall Street investors. Netflix is forecasting low subscriber growth in the coming months and Paramount Global (formerly ViacomCBS) are fielding worries about cash flow.
Zaslav is confident about Discovery and WarnerMedia’s financial future, noting that Discovery has a strong cash flow. He does anticipate more spending, but says it will be done cautiously: “You’re not going to hear us say we are going to spend $5 billion more” than the projected budget.
The CEO also rejects the idea that more original content would mean more money for a channel.
“If you say we do 600 hours on Food Network and they like it and we make $400 million, for example, if we did another 400 hours of content, maybe audiences would be a little happier but we would make no money,” Zaslav explained.
“We want to compete against Disney and Netflix, but we are very different,” Zaslav continued. “Disney has a group of people across the world that absolutely love their product. Netflix has a very broad appeal product.”
He referred to Discovery’s content as “nourishment,” while Warner offers consumers “shock and awe.” The combination of both companies’ content libraries offers audiences “a really compelling menu.”
The $43 million merger between Discovery and WarnerMedia is expected to be finalized in April.
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