Warner Bros. and Paramount end their merger talks without action
posted Sunday Mar 3, 2024 by Scott Ertz
The past few months have been filled with rumors and speculation about the potential merger of two of the major corporate streaming and media giants: Warner Bros. Discovery and Paramount. The merger, if it had come to fruition, would have created a major rival for top streaming company: Netflix. But, talks appear to have ended before any action was taken.
Warner Bros. Discovery
Warner Bros. Discovery (WBD) was formed from WarnerMedia's spin-off by AT&T and merger with Discovery, Inc. on April 8, 2022. The company's properties are divided into nine business units, with one of the most high-profile units being its streaming division. The merger of the two companies ended in the merger of their streaming services, HBO Max and Discover+, into the MAX service. This service combined the wholly-owned intellectual properties of both companies with additional licensed material.
Warner Bros. Discovery creates and distributes a differentiated and complete portfolio of content and brands across television, film, and streaming. It owns and operates some of the most popular and diverse media brands and products, such as Discovery Channel, HBO, DC, CNN, and Warner Bros. Pictures. These brands help support the company's streaming ambitions. Those ambitions have operated in the red since inception, with the exception being this past quarter where streaming finally turned a profit for WBD.
Paramount
Like Warner Bros. Discovery, Paramount is a large media company that represents a wide variety of content and distribution. The company's streaming service, Paramount+ (formerly CBS All Access), is the central repository for much of the company's intellectual property. The service offers existing content from brands like CBS, Nickelodeon, and BET.
In addition, the streaming service has its own intellectual property. Several Paramount+ Star Trek series have been exclusive, as well as series like the Frasier reboot, and even the Halo series. Like MAX, Paramount+ has never turned a profit, including in this most recent quarter. The company has failed under 2 different brands to gain enough subscribers to make the brand a financial success.
A merged company could improve streaming
If WBD and Paramount had come to an agreement to merge, the combined streaming service could have actually put up a fight against Netflix. MAX currently has 97.7 million subscribers and Paramount+ has 67.5 million. Together there would not be 160+ million, as there are duplicates between the services, but it would get the service closer to Netflix's 238.3 million subscriber count.
The future of Paramount
While the talks seem to have stopped between WBD and Paramount, bringing an end to this current chapter, it doens't mean that the story is complete. In fact, the two companies could return to the table in the future. Or, new talks could emerge between PAramount and another company. Thi sis because Paramount has an exploratory comittee dedicated to finding a suitable buyer for the struggling company. Some brands would likely be off the table. For example, the idea of NBC and CBS being owned by Comcast seems farfetched. But, a non-US company could be interested in the brand, or another suitor like Skydance could enter the conversation.
Either way, Paramount seems dedicated to the idea of ending its solo run and joining another media brand in one way or another.
