The Federal Telecommunications Institute (IFT) reported in a statement that it endorsed the concentration of Warner Media, owned by AT&T, and Discovery to create a new streaming content giant. The merger of both companies includes business and operations, and tangible and intangible assets -Mexican subsidiaries of Warner Media-, as well as the direct distribution to the consumer of HBO Max in Mexico.
The decision to unify the assets of both companies was presented on September 24 of last year, 2021. Then Discovery and AT&T informed the IFT that on April 8 of this year they closed the acquisition of Warner Media internationally, but had excluded the acquisition of the Mexican Subsidiaries of Warner Media and HBO Max DTC (Mexican Business) until obtaining the approval of the Mexican regulator.
Both companies are still fine-tuning the details of the integration of their catalogs, prices and the name that the new platform could have.
What will happen to HBO Max?
A few weeks ago both companies reported that due to the unification of assets, the HBO Max streaming platform will undergo changes, ranging from adjustments to the portfolio, eliminating movie releases 45 days after the exhibition in theaters, to the name of the application.
HBO Max has already removed movies from its catalog and will soon remove the Harry Potter saga in the United States, as part of its global restructuring after the merger of Warner Media and Discovery.
All these modifications will take effect in Latin America next summer of 2023, which will imply that streaming could also change its price.
The merger generates a ‘disagreement’ between the IFT and Cofece
The merger of production companies is a trend due to the boom in the streaming market that demands more programming and new productions. However, the resolution of the merger between Discoery and Warner Media was stopped because the IFT and the Economic Competition Commission (Cofece) entered into a controversy over who was responsible for the resolution.
Until last year, Cofece was listed as the regulator that would resolve the case. However, the IFT claimed before specialized Courts the remission of the issue, since it considers that the streaming market is within its competence.
Given the rush to have a resolution, the Plenary of the IFT considered it appropriate to analyze and issue a resolution on the “Mexican Operation” of both companies, arguing that it was a notified operation that had not been carried out and on which it is possible to identify its effects separately from those of the “International Operation”.
A concentration of children’s content?
The telecommunications regulatory body explained that for the resolution it identified that Warner Media participates by being in the market for the provision and licensing of audiovisual content for pay TV in the children’s programming category, through the channels of Cartoon Network and Cartoonito (previously owned by Warner Media), as well as Discovery Kids (formerly owned by Discovery), this could represent a risk to competition.
The IFT said that both companies voluntarily submitted a proposal to “remedy any risk to competition”, and that it considers attending to and negotiating all requests for access to Warner Media’s restricted channels made by any operator of the TV service. of pay.
They also agreed not to tie or bundle the restricted children’s channels owned by Warner Media, with the restricted channel of Discovery Kids, as well as not to transfer audiovisual content from the restricted children’s channels owned by Warner Media to the Discovery Kids channel, nor vice versa.