The fact is broadcast is struggling, and now after years of big spending to convert cable viewers to streaming subscribers, the reality is sinking in that not every streamer will survive. In a recent episode of The Town podcast, Bloomberg’s Lucas Shaw discussed with host Matt Belloni how several platforms including Paramount+ should now get out of the streaming business—they were late to the party and now it’s become obvious they’re not going to survive. A lot of this has to do with the state of the overall industry.
Paramount and Warner Brothers are both been left as the smaller media and entertainment entities as the whole industry went through a delayed convergence and merger shift. Sitting in 7th place Peacock, owned by NBC Universal (itself owned by cable provider Comcast), is struggling more than the other traditional US networks, yet it likely has one of the safest paths ahead. As the Hulu breakup became clear, NBC Universal is left with a big cash settlement for its third of the business, and now it can focus on Peacock. Meanwhile Comcast is looking to help streamers replace the channels on their cable system. Cable companies have become mostly internet providers and they’re happy to bundle a set top box for the streaming platforms as network television goes dark. That doesn’t completely save Peacock, and by extension NBC.
Industry insiders see a day where consumers are left with two to three main streaming platforms, which could easily be the cable tv replacement bundled up by the cable companies. At the moment Netflix is likely a clear candidate for the list. Until recently Amazon’s Prime Video was not seen as a contender for the top streamers—like the offering from Apple, Prime Video is a piece of a larger subscription service, literally thrown into Prime. The MGM purchase and a recent switch to the bundled video offering being ad supported suggests Amazon might be positioning itself after all. Previously Amazon would have been grouped in with Apple, and if they’d been successful, the bundle from Google—tech companies whose main business is not entertainment. Following the MG purchase, analysts have wondered when Apple will by a studio, mostly for the library, but it would come with a backup plan should the streamer pull the plug.
As it stands Amazon is second with streaming subscribers, though there remains a question whether all Prime customers are streaming and not merely getting that purchases delivered faster. While Wall Street analysts wring their hands about the fate of Disney+ and the wide Disney company, they’re doing well at third. Previously Disney+ would have been an easy second place streamer, able to position itself as the family friendly platform against Netflix. But the lines have blurred—Disney’s adult leaning Hulu is most often bundled into Disney+ creating an offering more targeted to adults (maybe the Disney library is actually about nostalgia, not giving kids Moana and Frozen on an endless loop).
Back to Warner Brothers (WBD) and Paramount+ and rumours that they might merge once WBD is allowed to make a move after April. The streaming options (now plain Max and Paramount+) sit at fourth and fifth on the subscriber ranking. Paramount through its CBS network has a lot of viewers, mostly those over 65 who enjoy the stable of procedurals. Would a merged or simply a bundled Max-Paramount+ streamer make sense and more important, get to second or third place? Analyst Lucas Shaw didn’t think 1 + 1 would equal two in that case, the sum of those parts don’t equal a whole. Max has 97 million subscribers, though the number possibly came from some creative accounting, and the mountain of entertainment, which has been silently dropping shows from the platform, sits at 67 million subs.
In theory a full merger could result in one third place streamer, with a bundle of the two products not likely to benefit equally. (WBD could merge with Paramount with fewer regulatory hurdles in the US given the lack of a traditional broadcast network with in the WBD side. Paramount and NBC Universal would likely face more scrutiny and require one of them to sell off a network. WBD could also look to merge with NBC Universal though there appears to be no interest there, it’s more likely Comcast would just swallow WBD or equally Paramount. Then again, it seems from the signals coming from Paramount majority voting share owner Sheri Redstone, a merge seems unlikely.) In the end it’s unlikely Paramount Max will happen (or the MaxCock, ParaCock/PeaMount combos).
Meanwhile Disney+ would like to partner with a tech giant or someone else with deep pockets but mainly to prop up expensive sports rights. (While there are few real rumours from Apple, it may just be wishful thinking that Apple would be the one to invest in Disney). ABC may have been on the selling block but not anymore.
The landscape is going to change, and it may come rapidly. Sadly while the viewer is going to benefit from fewer services, the transition is going to be frustrating. Paramount+ set itself apart by being the home of Star Trek, and by extending the franchise into premium television. Yet like the flood of Marvel content, there may be almost too much Star Trek (but it’s in no way as bad as Marvel, or Star Wars). Where would Star Trek go if Paramount shuts down? Back to Netflix? Or could there be a better niche home for sci-fi streaming?