[Kennedy Felton]
If you’re tired of juggling streaming services and rising subscription costs, get ready. A big shakeup at CNN’s parent company could make things even more complicated.
Warner Bros. Discovery — the company behind CNN, HBO, TLC and HGTV — is reportedly planning to separate its cable TV channels into a new company, according to CNBC. The move would follow a similar decision by Comcast, which is also spinning off its slower-growing cable networks like MSNBC, CNBC and E!.
The news helped boost Warner Bros. Discovery’s stock by as much as 5% on Thursday, May 8, a sharp turnaround after the company reported weak earnings, including a steep drop in ad revenue from traditional cable TV. Investors reportedly hope that spinning off older and weaker cable assets will help the company focus more on its movie and growing streaming businesses, which saw an unexpected rise in subscribers this past quarter.
This marks another big shift in the media world since WarnerMedia and Discovery merged in 2022 in a $43 billion deal. At the time, the goal was to combine popular lifestyle and entertainment channels — like TLC and HGTV — with major brands like HBO and CNN to build a stronger streaming platform.
Unbiased. Straight Facts.TM
56 million, or 46%, of U.S. internet households are “cord cutters,” meaning they canceled cable subscriptions, while 12% never subscribed to any sort of traditional pay TV, according to Parks Associates.
But as more viewers continue to cut the cord, companies are under growing pressure to keep their streaming services profitable — and increase those profits over time.
If the split happens, Warner Bros. Discovery would become two separate companies, one for cable channels like Food Network, TBS and HGTV, and the other for its studio and streaming services. Both would still be owned by the same shareholders but would operate independently, with their own finances, management and corporate structure.
The company had earlier talks with Paramount about a possible merger, but Paramount ended up opting for a deal from Skydance led by David Ellison.
Some analysts said splitting off the cable business could give those channels more freedom to license shows to different streaming platforms, which could be good for viewers. But others are skeptical and said moves like this are more about cleaning up company finances than helping audiences.
