Warner Bros. Discovery Splits Streaming & Studios from Networks
In a landmark move announced June 9, 2025, Warner Bros. Discovery (WBD) confirmed plans to bifurcate into two publicly traded entities. One will consolidate its high-growth streaming and studios division, the other will house its traditional television and news networks. Leadership believes this carve-out will sharpen focus, enhance strategic flexibility, and unlock shareholder value.
Deal Structure & Timeline
The transaction follows an initial announcement in late 2024 and is slated for completion by mid-2026. Post-split:
- Streaming & Studios: Includes HBO, HBO Max, Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, and a combined content library exceeding 200,000 hours.
- Global Networks: Encompasses CNN, TNT Sports (US), Discovery Channel, and other entertainment and news channels across 150 markets.
“By separating legacy networks from rapidly scaling streaming, each business can pursue tailored capital allocation and technology investments,” said CEO David Zaslav.
Technical Infrastructure Implications
On the streaming side, WBD has accelerated migration of HBO Max to hyperscale cloud environments. The platform now relies on AWS Elemental for live transcoding and Amazon CloudFront as its primary CDN, serving up to 80 Tbps peak traffic globally. Microservices architectures, orchestrated by Kubernetes and managed via AWS EKS, enable dynamic autoscaling to handle demand spikes during major releases like Sinners.
Key technical specs:
- Content Delivery: 99.99% uptime SLA across 200 PoPs.
- Data & Analytics: Real-time viewer telemetry with Kafka pipelines feeding ML models for personalized recommendations.
- Security & DRM: AES-128 encryption with Widevine, PlayReady, and FairPlay support.
Market & Competitive Analysis
WBD’s peers—Comcast (NBCUniversal) and Paramount Global—have embarked on similar splits to isolate digital assets. Analyst firm MoffettNathanson projects WBD Streaming EBITDA growth of 18% CAGR through 2028, outpacing the 3% decline in traditional ad-supported networks.
- Streaming Growth Drivers: Global subscriber expansion in APAC and LatAm, bundled telecom partnerships, and interactive ad insertion.
- Network Challenges: Cord-cutting trends, rising content acquisition costs, and competition from FAST (Free Ad-Supported Streaming) channels.
Expert Perspectives
Media strategist Sarah Littlejohn of S&P Global Ratings notes, “Splitting allows WBD to fine-tune leverage ratios—targeting 3.5x net debt/EBITDA for streaming while reducing volatility for networks at around 2x.”
Former HBO CTO Rajesh Patel adds, “A dedicated engineering budget will accelerate AI tools for content creation, from scriptwriting assistants to deepfake de-aging in post-production.”
Future Outlook
With shares up 10% pre-market, investors appear optimistic. Each entity will file separate 10-K reports, host independent investor days, and set distinct carbon-reduction targets aligned with Science Based Targets initiative (SBTi). Stakeholders will watch to see if the carve-out delivers faster innovation cycles and stronger profitability across both businesses.