Paramount seeks streaming partner. Warner Bros. Discovery is interested | Wilnesh News

Paramount Worldwide is in talks with other entertainment companies to merge its Paramount+ streaming service with existing platforms. If a deal is reached, it could spark a new wave of streaming partnerships that could put the entire media industry on a firmer footing.

Paramount global leadership is in active discussions with other media and technology company executives to determine whether a structure in which Paramount+ could be merged with another streaming entity and potentially co-owned makes sense for both parties, according to people familiar with the matter. . The person spoke on condition of anonymity because the discussion is private.

One of the companies that has expressed hope for a deal is Warner Bros. DiscoveryAccording to people familiar with the matter. The combination of Max and Paramount+ enhances both services, allowing them to better integrate with Netflix and disney Suite of platforms (Disney+, Hulu and ESPN) for attention-grabbing and future content.

Earlier this year, Warner Bros. Discovery held preliminary merger talks to acquire all of Paramount Worldwide, but the talks did not escalate.

Paramount Global Co-CEO Chris McCarthy said at the employee town hall on June 25 that the company is also considering cooperation with technology platforms.

“What they lack is the scale of our content,” McCarthy said of a potential technology partner at City Hall, according to a transcript of the meeting. “Together we will create a very powerful combination to drive more time and greater profits.

The combined streaming service would reduce churn by giving customers a more diverse lineup of programming and fewer reasons to cancel each month, and could eliminate Paramount+’s legacy by giving Paramount Global new ownership. Balance sheet losses.

While the structure of the hypothetical joint venture with Warner Bros. Discovery Channel has not been discussed in detail, ownership likely will not be a 50:50 split given the existing nature of the streaming assets and their financial position, according to people familiar with the matter.

Warner Bros. Discovery Channel’s direct-to-consumer business posted adjusted annual EBITDA of $103 million in 2023 after losing $2.1 billion the previous year. Paramount Global reported a direct-to-consumer operating income loss of $1.67 billion before depreciation and amortization in 2023, narrowing from a loss of $1.8 billion a year ago.

Max has approximately 100 million subscribers worldwide, 52.7 million of whom are from the United States.

Comcast NBCUniversal has also expressed interest in forming a joint venture with Paramount+, The Wall Street Journal first reported earlier this year. People familiar with the matter said the negotiations made no progress and never achieved extraordinary progress.

“Together we can deliver a wealth of popular content across TV, movies and sports that will reach millions of viewers,” McCarthy said during a town hall meeting about potential partnerships with existing subscription streaming services like Max. ” or peacock. “In addition, we will share all other non-content costs.”

Spokespersons for Warner Bros. Discovery Channel, NBCUniversal and Paramount Universal declined to comment.

Since the end of 2019, traditional media companies such as Paramount Universal, Disney, NBCUniversal, and Warner Bros. Discovery have launched streaming services, but have lost billions of dollars.

There’s long been a consensus in the industry that there are too many streaming services compared to the total number of paying customers. Many senior executives speculate that only four or five global services will survive and thrive. Other platforms need to be integrated or merged into existing platforms.

“There could be some combination of Paramount, Peacock and Max,” former Fox CEO and Chairman Peter Chernin said in a report. Interviewed by CNBC last year.

Media companies are now focused on better monetizing streaming content through bundling and partnerships. Disney and Warner Bros. Discovery have recently become more willing to license some of their content to rival streaming services. For example Netflixto better monetize shows that don’t add a lot of new subscribers to its streaming service.

Comcast recently launched Peacock, Netflix and Apple TV+ packages for $15 per month for its cable, broadband and mobile customers.

Disney and Warner Bros. Discovery Channel have announced that they plan to bundle their streaming services starting in the summer. One person familiar with the matter said that while the companies have not announced the price of the package, which includes Disney+, Hulu and Max, the discount will be “significant.”

Another hot topic currently being discussed revolves around the availability of movies and TV series at different price points through different streaming services.

The idea was considered by Skydance Media, which came close to acquiring Paramount Global. Negotiations broke down last month.

Several media executives have privately said they expect Peacock, Paramount+, Max and Disney to eventually collaborate on their shows in one app to ease confusion and compete with Netflix, which dominates the subscription streaming industry. Approximately 270 million subscribers worldwide.

Two executives said Disney would be the most likely company to own the app, given its relative dominance in the entertainment streaming industry. They added that any media company that provides content to streaming apps could share in the revenue, similar to how the cable TV economy works today.

Still, competition and tensions between companies could make such a product difficult to assemble. Comcast and Disney have long had a tense relationship, despite Max’s bundling deal with Disney. Currently the two parties are try to relax The joint venture — Hulu — gives Disney full control of the service that was originally jointly owned by NBCUniversal, Fox and Disney.

Revealed: Comcast-owned NBCUniversal is the parent company of CNBC.