AT&T Inc (T.US) is preparing to spin off Warner Media and merge it with Discovery (DISCA.US), with David Zaslav, chief executive of Discovery, as chief executive of the new company, according to Zhitong Financial APP.

It is understood that the merger of Warner Media and Discovery will exert great pressure on many small-scale streaming media companies. Among them, in the face of this merger, the relatively large-scale ViacomCBS (VIAC.US) and Comcast (CMCSA.US)'s NBCUniversal tried to merge and integrate their own streaming services with each other, but also appeared to be not large enough. In the streaming world, a company's success depends on the storage of a large amount of content and global coverage; this means that both companies need to provide more content to compete with new companies such as Netflix (NFLX.US), Amazon.Com Inc (AMZN.US) Prime Video, Walt Disney Company (DIS.US) and the merged Warnermedidiscovery.

Moreover, the merger of ViacomCBS and NBCUniversal will have both CBS and NBS, two US broadcast networks, which will not be approved by US regulators. Moreover, even if the parent company can theoretically split or sell webcasts, it is not possible in practice because it brings a lot of value to the parent company and its streaming services.

In addition, the dual shareholding structure is another obstacle for the two companies, as it makes it difficult for outsiders to put pressure on the two companies to make reforms that executives do not like. The merger of the two companies may also be blocked because ViacomCBS is controlled by Shari Redstone, chairman of Comcast, and NBCUniversal is controlled by Brian Roberts, chairman of Comcast.

There are currently four options for ViacomCBS and NBCUniversal:

1) acquisition.If both companies think their streaming services can compete around the world, they can continue to make acquisitions globally and domestically. It may take several deals to integrate smaller US assets with large global media companies in Latin America and Europe.

2) for sale.According to people familiar with the matter, Redstone is more open to the idea of selling ViacomCBS, but it is clear whether Roberts will consider selling NBCUniversal;. Potential buyers may include merged NBCUniversal, and Netflix.

3) reduce ambition.The third option is to abandon global streaming services. Instead, NBCUniversal and ViacomCBS can license their content to other larger players, and if Paramount+ and Peacock fail to gain global appeal, turn them off.

4) binding.ViacomCBS) and NBCUniversal can start bundling their streaming services together, or find new streaming partners to increase global distribution through discounted services. The main problem with this strategy is that it limits the advantages of the two companies, which cannot compete with larger competitors in top content and programming breadth.