Accumulating Debt in Cable TV Division Including CNN Amid Competition with Netflix
Warner Bros. Discovery, a major U.S. media and content conglomerate (hereafter Warner Bros.), announced on June 9 (local time) that it will split into two separately listed companies: one for streaming and studio operations, and another for its cable television division.
According to Warner Bros., the spun-off streaming and studio company will include film copyrights and the streaming service segment 'HBO Max.' The global networks company, which will also be spun off, will oversee TV broadcasting businesses such as the news channel CNN, as well as sports and entertainment. The spin-off process is expected to be completed by the middle of next year.
David Zaslav, CEO of Warner Bros., will lead the streaming and studio company. CEO Zaslav stated, "By operating two optimized companies, our iconic brands will have the clear focus and strategic flexibility needed to compete most effectively in the media landscape."
This restructuring of Warner Bros.' business is seen as part of efforts by traditional 'media giants,' who are struggling in the streaming service battle against Netflix, to improve profitability and secure future growth engines.
As consumer demand has shifted from cable television to online streaming, the traditional cable TV business division has faced difficulties, including accumulating debt. In contrast, the streaming segment, including HBO Max, which competes with Netflix, is regarded as a future growth business.
Previously, U.S. media giant Comcast also announced last year that it would pursue a business restructuring to separate its cable TV division from its other business segments, such as streaming services and theme parks.
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