By Mallory Mattingly
Warner Bros. Discovery and NBCUniversal announced plans to spinoff their cable networks, a move that Disney CEO Bob Iger says plays to his company’s “advantage.”
According to Variety, Warner Bros. Discovery “announced it would split the company in two.” One company, led by David Zaslav, will be WBD’s studio and streaming businesses, HBO Max and Warner Bros.’ games and experiences. The other new company will be comprised of its cable properties, including channels like CNN, TNT, TBS, Discovery, Food Network, HGTV and several others.
Comcast, meanwhile, will spinoff most of its NBCUniversal cable networks into Versant, a newly announced publicly traded company.
“It’s interesting to us that as many others exit that business, I think it gives us a stronger hand to stay in that business,” Iger said of WBD and NBCU on CNBC. “You know, we’re very focused. We will have, interestingly enough, a linear television business that’s paired with a streaming business. So, when you think about it, these spinoff companies won’t have the assets from a streaming perspective that we will have. Again, I think that gives us an advantage.”
When Iger returned as CEO of Disney a few years ago, he asked his team two questions: “whether Disney should buy Hulu or sell it, and whether the company should sell our linear television networks or whether we should hold on to them.”
“After a pretty lengthy process internally and really taking a long look at what these properties could mean to us long term, we decided that the best course for us to take was to not only hold on to Hulu and buy it in its entirety but also to hold on to the linear television networks and to integrate them seamlessly with our streaming business,” Iger explained.
This combination of streaming and linear TV for Disney “is actually a winning combination.”
Related: Disney CEO Says Disney Will Maintain Ad-Free Streaming
“It’s one of the things that’s enabled us to turn the streaming business around from a huge loss to profitability,” he emphasized, “and over the next several years it will enable us to grow margins significantly on the streaming side because [of], again, the ability to amortize program costs and the ability to essentially aggregate audiences and revenue.”
Disney just closed a huge Hulu deal with Comcast. Disney bought NBCUniversal’s remaining stake of Hulu and is now the sole owner of the streaming service, acquiring the streamer for an additional $438.7 million.
“So obviously, we’re very pleased with this result. But now we’re focused on doing what we intended to do once we gain full control of [Hulu],” Iger revealed. “And that’s basically to put these apps together seamlessly, to create an experience for the consumer that’s easier to use, easier to buy, to increase engagement, to lower churn, to grow subs, and ultimately to consolidate more and to save some money in terms of the operation.”
While other major entertainment players split up in an effort to stay afloat as cable’s relevancy dies away, Disney is holding firm to its current course.
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