Higher prices, simpler streaming expected if HBO Max folds into Paramount+
If a company acquires some form of HBO, one of its main challenges will likely be streamlining its operations while retaining HBO’s premium brand. This could be particularly difficult under a “more traditional umbrella like Paramount+,” Alderman noted.
Streaming has already diluted the HBO brand somewhat. Through streaming, HBO is now bundled with content from DC Comics and Cartoon Network, as well as reality shows, like 90 Day Fiancé And Naked and scared. The merger with Paramount+ or even Netflix could further expand HBO’s scope.
This expanded umbrella could allow a company like Paramount to better compete with Netflix, something WBD executives have been reluctant to avoid. HBO Max is “not everything to everyone in a household,” JB Perrette, WBD’s president and CEO of streaming, said this spring.
“What people expect from us in a world where they have Netflix and Amazon [Prime Video] are those things that differentiate us,” Casey Bloys, chairman and CEO of HBO and Max Content, told the Wall Street Journal in May.
A “stress test” for more streaming mergers
Aside from the impact on HBO Max subscribers, WBD’s merger negotiations have broad implications. A deal would open the door to much greater consolidation in the streaming space, something experts have anticipated for several years and which would respond to the boom in streaming services. According to Clark, discussions about a Paramount-WBD merger are “less about the union of two studios and more about a stress test for future mergers and acquisitions.”
If WBD accepts an offer from Paramount and that offer clears regulatory hurdles, it would signal that “premium content under fewer umbrellas is back in play,” Clark said.
A Paramount-WBD merger is likely to accelerate consolidation among mid-tier players, like NBCUniversal, Lionsgate and AMC, Alderman said, highlighting those companies’ interest in growing their streaming businesses and building differentiated portfolios to counter the vast libraries of Netflix and Disney+.
If Paramount and WBD don’t merge, Clark expects to see more “fragmented” strategies, such as rights sharing, joint venture bundles and streaming-as-a-service models.
