3 (Related) Reasons Merging HBO Max and Discovery+ Is a Mistake
On the surface, the concept of combining streaming services HBO Max and Discovery+ seems sound enough. They're both part of the same company, after all, since Discovery acquired Warner Bros. Entertainment from AT&T back in April to officially become Warner Bros. Discovery (NASDAQ: WBD). There's no need to manage two distinct direct-to-consumer services when pairing them up would create marketability synergies.
Investors certainly welcome any move that might jolt the newly melded organizations into viability too. Shares of the unprofitable media giant are down over 20% just since the release of its second-quarter results on Aug. 4, with revenue of $9.8 billion falling well short of the expected $11.8 billion. Earnings missed, too. The subsequent selloff marks a 45% year-to-date loss and caps off more than an 80% pullback from last year's highs. At this point, doing anything is better than doing nothing at all.
If you think combining Discovery+ and HBO Max into a single service is going to be the much-needed panacea, however, think again. There are three reasons the two platforms should remain separate, no matter how compelling the idea of merging them into a single super-service seems on the surface.
Source Fool.com
