Paramount seeks streaming partner, sparking potential deal surge

Paramount Global is currently engaged in discussions with various entertainment companies regarding the potential merger of its Paramount+ streaming service with an established platform. If an agreement is reached, it has the potential to initiate a fresh wave of partnerships within the streaming industry, which could significantly impact the overall media landscape.

Leadership at Paramount Global is actively in talks with executives from other media and technology firms to explore the feasibility of merging Paramount+ with another streaming service, potentially resulting in a shared ownership structure. Sources familiar with the matter, who preferred to remain anonymous due to the confidential nature of the discussions, revealed this ongoing dialogue.

Among the companies expressing interest in striking a deal is Warner Bros. Discovery. Combining the offerings of Max and Paramount+ could enhance both platforms’ competitiveness, enabling them to better rival industry giants like Netflix and Disney’s suite of platforms, including Disney+, Hulu, and ESPN.

Earlier this year, Warner Bros. Discovery engaged in preliminary discussions for a potential merger with Paramount Global, although these talks did not progress beyond the initial stages. Additionally, Paramount Global is contemplating a collaboration with a technology platform, as highlighted by the company’s co-CEO, Chris McCarthy, during an internal town hall meeting in June.

McCarthy emphasized the potential synergy between Paramount Global’s content scale and the technological capabilities of a prospective partner, envisioning a robust alliance that drives increased viewership and profitability. A merged streaming service could reduce customer churn by offering a broader range of programming, thereby minimizing subscription cancellations and potentially alleviating Paramount+’s financial losses.

While specific details regarding a joint venture with Warner Bros. Discovery have not been extensively deliberated, insiders familiar with the discussions suggest that ownership distribution is likely to be asymmetrical, considering the distinct nature of the streaming assets and their financial standings.

In terms of performance metrics, Warner Bros. Discovery’s direct-to-consumer segment generated $103 million in annual adjusted EBITDA in 2023, a significant improvement from the previous year’s $2.1 billion loss. On the other hand, Paramount Global reported a narrower direct-to-consumer operating income loss of $1.67 billion in 2023 compared to $1.8 billion in the preceding year.

With approximately 100 million global subscribers, including 52.7 million in the U.S., Max boasts a substantial subscriber base. Meanwhile, Paramount+ concluded the first quarter of the year with 71 million subscribers.

Comcast’s NBCUniversal has also shown interest in collaborating with Paramount+. Although discussions did not progress significantly, the potential partnership was anticipated to offer a vast array of compelling content spanning television, film, and sports, with the aim of attracting a substantial audience base.

Representatives from Warner Bros. Discovery, NBCUniversal, and Paramount Global declined to provide comments on the ongoing discussions and potential partnerships.