SteelHouse CEO Mark Douglas Weighs in On the Media Mega Deal Taking the Industry by Storm – SteelHouse

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What does the latest WarnerMedia and Discovery merger mean for the streaming industry?

Written by Melissa Yap

WarnerMedia’s merger with Discovery in a $43 Billion deal is the talk of the town in media and digital advertising circles, but will it deliver what it promises? SteelHouse CEO Mark Douglas joined Yahoo! Finance to discuss how the new merger will impact the streaming industry. “This combination has a chance at breaking into the top three or four streaming providers. You get a lot of original content and combine that with documentary and filler content. This merger does that,” says Douglas.

A Flexible (and Lucrative) Business Model

The latest merger is a smart move from the two companies, both from a revenue standpoint but also offering customers a new level of flexibility in a fragmented market. “This deal can offer both subscription pricing and ad supported streaming, and make a lot of revenue from ad supported content by bringing streaming to people who are otherwise resistant to paying subscription fees,” says Douglas.

It’s not only a smart revenue move, but a smart one that will unlock more options for users, “what’s also really interesting about Discovery is that they can offer subscription pricing, but they’re also really good at ad-supported streaming. So they can potentially bring their price points down a lot lower.” Lower prices, more revenue, greater flexibility – what’s not to like?

Double-Dipping Much?

This deal replicates moves from other top streaming providers, like Disney. For example, they positioned themselves to ‘double dip’ through both cable and then its Disney+ offering. WarnerMedia and Discovery is doing the same thing, “Discovery is a primary content source in pretty much every cable subscription bundle, and even the skinny bundles like from Hulu…it’s nice to have in some sense your competitors contributing revenue to your company while you’re building a presence to compete with them in the long term at the same time,” explains Douglas.

Why Weren’t AT&T and Verizon Able to Get it Right?

Unfortunately, not all companies got it quite right as this WarnerMedia and Discovery – for example, Verizon Media Group has been left in a losing position through their sale to Apollo, and AT&T recently offloaded their linear TV business at a loss. Where did it go so wrong? Douglas highlights vision and execution as the big win for WarnerMedia and Discovery, “if you want to win streaming, you can’t just assemble content, you have to bring a vision to the table. Disney did it, Netflix basically invented it along with Hulu back in the days. And those things are important, and Discovery has got access to capital, huge content library, huge budget for content, and they’re executing in an incredible way.”