Distancing Themselves from Cable TV

The owner of CNN knows that the future (present) is in streaming and not cable TV.

Warner Bros. Discovery, the entertainment giant behind HBO and CNN, recently announced a significant restructuring, opting to split into two distinct companies. This strategic move will separate its cable networks from its burgeoning streaming and studio operations. David Zaslav, the current CEO, will lead the new streaming and studios business, which includes flagship assets like HBO Max and the Warner Bros. Motion Picture Group. Meanwhile, Gunnar Wiedenfels, currently the CFO, will take the helm of the cable business, encompassing channels such as CNN.

According to Zaslav, this division aims to give each entity a sharper focus and greater strategic flexibility, allowing them to compete more effectively in the rapidly evolving media landscape. The company anticipates completing this separation by mid-next year. This decision comes as many U.S. media conglomerates are looking to divest their shrinking cable interests to concentrate on the faster-growing streaming sector, a trend exemplified by Comcast's earlier move to spin off its traditional TV business into Versant.

The restructuring follows a challenging period for Warner Bros. Discovery. Since its formation three years ago from the merger of Discovery and Time Warner assets, the company has struggled to impress shareholders, losing roughly half its value. This has been attributed to the challenge of harmonizing its diverse content, from reality shows like "90 Day Fiancé" to acclaimed dramas such as "The White Lotus," across both traditional and streaming platforms. Additionally, the company has faced branding confusion with its flagship streaming service, which has seen several name changes, including dropping and re-adding "HBO" to its title.

My guess is that you will see the cable side put up for sale at some point and they will hold on to the streaming side.

Stay tuned…