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CNN+ among short-lived streaming services after Warner Bros. Discovery shuts it down

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Yahoo Finance’s Andy Serwer joins the Live show to discuss Warner Brothers Discovery's short-lived streaming service CNN+, quarterly earnings for Netflix and the company's subscriber loss, and the outlook for streaming companies.

Video transcript

BRIAN SOZZI: This is surprising. Is this just a case of big media egos, where you have David Zaslav, who didn't want to even think about restructuring this or putting his name to it in any way?

ANDY SERWER: Well, Brian, I think this speaks to two things. First of all, it's specific to the Discovery and Time Warner deal, number one. And number two, I think it speaks to bigger issues going on in the media business. Yes, David Zaslav not keen on this streaming property at all. In fact, they've had some bad experiences at that company with smaller niche streaming businesses. And so they wanted to have one big streaming endeavor. So that's what pertains directly to that company.

But then, overall, it's been a rough go of it for streaming this week. I mean, we just look at what happened with Netflix earlier in the week, losing 200,000 subscribers in the quarter and the stank-- and the stock tanking, the stank talking, too. But, you know, what was really going on, of course, is that streaming was seen as this sort of, like, new be all to end all. Really, it's just another form of distribution, and not all that.

JULIE HYMAN: Yeah, I mean, it is interesting the CNN+, looking at it through the lens of, on the one hand, sort of management issues, on the other hand, what it says about streaming. And so, as people look over the streaming landscape and investors try and figure out what is it going to look like from now, we heard from Mark Mahaney earlier in the week who said, Netflix isn't a premium growth stock anymore. So I guess people just have to refigure all their expectations of what this space looks like.

ANDY SERWER: Yeah, Julie, I mean, it's a comeuppance, no doubt about that. And when you look at Netflix, I mean, there's at least four things going on. On the supply side, there is just a massive amount of content. Everyone is in the streaming game. They're not differentiated particularly. Yes, they have a better UX, but still, there's just so much content out there. On the demand side of things, people are back at work more and more. That means they're at home less and less, less time to stream.

Then you've got inflation. That's number three, right? So people are starting to say maybe I should cut back a little bit on expenses. And then, finally, it's TAM, the Total Addressable Market. You know, they've saturated North America, certainly. Yeah, there's growth overseas, and if they're looking for the advertising business to be the Holy Grail savior, it's not all that.

BRIAN SOZZI: Andy, is there more M&A likely to come in the space?

ANDY SERWER: That's an excellent point, Brian. I was talking to a top M&A lawyer last night, and she was telling me she expects consolidation in the media business big time coming up, because there's this shakeout. And we've always talked about Netflix being-- combining with some other entity. And then you look at the other parties kind of sitting around the table. And Discovery and Time Warner and then with that kind of combination and decoupling both at the same time, I think, is maybe the harbinger of a lot more things to come, particularly as you're seeing the topping out with the streaming business.

BRIAN SOZZI: It is good to see, at least, a lot of the journalists finding perhaps other jobs inside of CNN. I've also seen a lot of outreach out there as well.

ANDY SERWER: Yeah, I mean, you know, it's a tough business, right? I mean, you're talking about sort of two pieces of it, which is to say the news business, which is a tough business. The entertainment business less difficult, but there are so many players. I mean, it's great to be a showrunner right now. But I think maybe in 24 months, maybe not so great to be a showrunner, because really, more shows, more shows? At some point, it's going to top out.

BRIAN SOZZI: Point well taken. Yahoo Finance's editor-in-chief Andy Serwer, good to see you.

ANDY SERWER: Thanks, Brian.

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