The owner of CNN and HBO Max, Warner Bros Discovery, has announced plans to split into two separate companies by the middle of next year. This strategic move aims to divide the company’s studio and streaming business from its more traditional cable television networks. The decision comes at a time when streaming services are rapidly attracting hundreds of millions of users globally, while cable television has experienced a notable decline in viewership over recent years.
HBO Max has thrived with critically acclaimed shows like Succession, The White Lotus, and The Last of Us, contributing significantly to the company’s footprint in the streaming market. In contrast, traditional channels such as CNN have struggled, facing a downturn in audience numbers. These popular series will soon be integrated into a new division named Streaming & Studios, which will also include the company’s film division. This segment will be overseen by Warner Bros Discovery President and CEO, David Zaslav.
The second entity, named Global Networks, will encompass brands like CNN, Discovery, and TNT Sports. This division will be led by Warner Bros Discovery's Chief Financial Officer, Gunnar Wiedenfels. “We are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Zaslav stated, underscoring the rationale behind the split.
The announcement of the split did not significantly bolster Warner Bros Discovery’s stock market performance. On the day of the announcement, shares dropped nearly 3%, contributing to an overall decline of more than 10% in the stock this year. Peter Jankovskis, an analyst at Arbor Financial Services, remarked that the separation would enable investors to better understand the value of each new company. “When you make the business less complicated, analysts can go in and do a better job of determining what the business is actually worth,” he explained to the BBC.
As Warner Bros Discovery’s flagship news channel, CNN has faced a significant decline in ratings, averaging just 558,000 viewers during primetime hours in the first quarter of this year—a 6% decrease from the same timeframe in 2024. In an effort to pivot towards its digital offerings, the network announced in January that it would lay off more than 200 employees, further reflecting the shifting landscape of media consumption.
The outlook for Warner Bros Discovery’s streaming platforms remains more optimistic, boasting over 122 million subscribers by the end of Q1 this year. The announcement of the company’s split aligns with wider trends in the media industry, particularly following Comcast's recent announcement to spin off its NBCUniversal cable television arm. This ongoing breakup will see channels like MSNBC and CNBC being separated from Comcast's other brands, including its Peacock streaming service. “It’s a very competitive market right now, so many firms are trying to segregate out the streaming portion or the content portion of their businesses so that the remaining business can be valued separately,” Jankovskis noted, highlighting the current challenges and strategies within the media sector.
