Paramount CEO David Ellison said the company’s upcoming merger with Warner Bros. Discovery would give it the scale it needs to compete with Netflix, especially when Paramount+ and HBO Max merge.
“Over the next several years, we will bring together the streaming portfolios of both companies into a more powerful platform,” Ellison told Wall Street analysts on a conference call Monday to discuss the $111 billion deal. On Paramount+ and HBO, he said, “there are more than 200 million people [direct-to-consumer] Subscribers today and in more than 100 countries and territories around the world, allowing us to compete effectively with the leading streaming services in the market today. “
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Netflix said in January that it would have 325 million subscribers worldwide by 2025. While Ellison’s estimate of the combined footprint of Paramount+ and HBO Max is accurate, the 200 million figure counts each subscriber base individually. As with many of the leading streaming media outlets, there is overlap, with many subscribers getting both services.
Another problem AT&T discovered after acquiring Time Warner in 2018 and trying to ramp up streaming was HBO’s linear distribution. While the linear base has declined due to cord-cutting, millions of households still get quality internet the old-fashioned way through cable and satellite providers. That means new negotiations must be completed to explore streaming without pricing or packaging restrictions.
After Skydance merged with Paramount, Ellison, the son of Oracle billionaire Larry Ellison, worked to merge the technology stack of free, ad-supported Pluto TV, Paramount+ and BET+. This simplifies back-end operations, saves money and makes things run more smoothly. Ellison said WBD may undergo similar integrations on the technology side.
“We think the combined offering will really allow us to compete with the largest players in DTC given the amount of content and what we can do on the technology side,” he said.
As he did during Skydance’s acquisition of Paramount, Ellison emphasized his plans to invest in the technology behind Paramount+.
“When it comes to DTC businesses, engagement is absolutely the key to success,” he said. “So you have to look at what drives engagement. By bringing these incredible studios and platforms together or giving audiences more of what they want from a content perspective, what audiences really want to engage with is more incredible content.”
