With AT&T and Comcast both releasing their Q4 earnings last week, there is enough new information to make it worth revisiting my PARQOR Hypothesis prediction for WarnerMedia and Comcast.
The obvious core of any potential merger, which some analysts continue to beat their drums for, is the Harry Potter IP:
- J.K. Rowling controls the Harry Potter franchise and has a say in everything involving the property.
- NBCU licenses the Harry Potter IP for U.S. broadcast, cable and streaming rights, and for its Universal Studios Theme Parks, and
- The Harry Potter Movie library has been moving between Peacock and HBO Max as part a side deal that allowed all of the Harry Potter features to briefly stream on HBO Max when the service launched last May
A merger would centralize all IP in one entity, and according to the PARQOR hypothesis, would create an ecosystem for monetizing streaming subscribers in multiple ways. My prediction for 2021 assumed that both companies share enough moving pieces in common to build a Disney-type ecosystem without needing to merge, and would need Six Flags to join in to make the merger work.
The business relationship between NBCU and WarnerMedia no longer reflects the optimal means of extracting value from Harry Potter IP: building out an ecosystem where Harry Potter fans can stream the content and be monetized multiple times.
Q4 earnings results for both AT&T and Comcast reflect how much more complicated the road ahead has become for both companies to reach that objective, both separately and as a merged entity.