New Streaming Platform: tough time for Netflix, Disney

The US telecom giant, AT&T owns CNN, HBO and Warner Bros. The tie-up will bring together one of Hollywood's biggest studios and Discovery's channels under the same ownership.

"This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms," said AT&T chief executive John Stankey.

The deal will create a separate business following the launch of a new streaming platform that will compete with Netflix and Disney.

WarnerMedia-owned HBO and HBO Max now have around 64 million subscribers worldwide.

It is currently dwarfed by larger rivals Netflix, which has 208 million subscribers, and Disney+, which has more than 100 million.

Discovery, which owns several channels including Animal Planet and the Discovery Channel reaches more than 88 million US homes, while its Discovery+ streaming service, which launched in January, has 15 million subscribers.

Under the terms of the deal, AT&T will receive $43 billion and its shareholders will own 71 per cent of the new company, while Discovery shareholders will hold 29%.