OPRAH AND CNN: AT&T IS MERGING MEDIA BUSINESS WITH DISCOVERY

The merger of Discovery and AT&T’s WarnerMedia operations, marrying the likes of HBO and CNN with HGTV and Oprah Winfrey, is another illustration of the head-spinning speed in which streaming has transformed the media world.

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.

The agreement was announced this week after AT&T CEO John Stankey and his Discovery counterpart, David Zaslav, worked out the details in Zaslav’s Manhattan brownstone over the past two months.

“I think, together, the combination makes us the best media company in the world,” said Zaslav, who will run the new company if approvals are granted, probably sometime next year.

The deal also represents a strategic retreat for AT&T.

The hope for the newly merged company is that, with a wider array of material than either can offer on its own, it can join Netflix, Amazon and Disney in the widely acknowledged top tier of streamers.

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.

WarnerMedia and Discovery both launched their own streaming services, HBO Max and Discovery+, within the past two years. It’s still not clear whether the merger will result in a single streaming service or several bundled together, but it will have a vast array of content to offer: scripted and reality TV, movies, sports including the NBA and NCAA men’s basketball tournament, and news with CNN.