Over the last few years, the streaming wars hit a standstill.
Netflix and YouTube have sat comfortably in the lead, competing head to head for the biggest share of viewing time in living rooms around the world. Disney and Amazon Prime Video have stood next in line. And then a host of other streaming services — HBO Max, Paramount+, Peacock and Apple TV among them — have jockeyed for position in a distant lower rung.
That could be changing now, with Paramount Skydance buying Warner Bros. Discovery for $111 billion.
David Ellison, the chairman of Paramount Skydance, told investors this week that Paramount+ and HBO Max would eventually merge into one streaming service, a move that he said “really positions us to compete with the leaders in this space.” He didn’t say what the service would be called.
Here’s a look at how the combined Paramount+ and HBO Max could alter the streaming landscape:
A big jump in subscribers …
The money from streaming is largely made from subscriptions, and that is where a mash-up makes the biggest difference.
There is little overlap between Warner Bros. Discovery’s 132 million streaming subscribers, the vast majority from HBO Max, and Paramount+’s 78.9 million. In the United States, only 21 percent of all Paramount+ subscribers have HBO Max, according to Antenna, a subscription research firm.
As a result, Paramount executives said, a combined streaming app would have roughly 200 million subscribers total. That would put Paramount-Warner in the same orbit as Disney’s combined subscription count and reasonably closer to Netflix, which has the highest subscriber figure at more than 325 million.
… but a smaller change in viewing time.
The other metric media executives obsess over, though, is viewing time. That’s another measure of a streaming service’s popularity because it spells out how much time people spend on an app. And by that measure, the deal would move the needle a lot less. Paramount+ accounts for 1.6 percent of all viewing time in the United States, and HBO Max represents an additional 1.2 percent, according to Nielsen.
Smashing them together would bring them to 2.8 percent, a smidgen behind Roku (3 percent) but well ahead of Peacock (1.8 percent in January). The Paramount-Warner app would still significantly trail YouTube (12.5 percent) and Netflix (8.8 percent), but the second tier of Prime Video (4.1 percent) and Disney+, Hulu and ESPN+ (4.9 percent combined) would be within closer reach.
(There are also a few other apps to figure out what to do with: Paramount owns the free streaming service Pluto as well as BET+. Soon the company would also own Discovery+. Add in those streaming services and Paramount would account for 3.7 percent of all streaming time, drawing it closer to Amazon and Disney.)
Sports could be a wild card.
Sports is the biggest sure bet in all of television right now. That’s one of the reasons that media companies keep investing billions more each year in sporting rights for leagues like the National Basketball Association and the National Football League.
A combined Paramount-Warner would be a major sports player, putting Paramount’s rights to the N.F.L., the Ultimate Fighting Championship and golf tournaments like the Masters alongside Warner’s rights to Major League Baseball and the National Hockey League. Together, they will have the rights to all of March Madness.
Robert Fishman, an analyst at MoffettNathanson, said sports could be a difference maker.
“Sports is the unique piece to this streaming combination that Warner Bros. Discovery did not have full access to, led by the N.F.L.,” he said.
So, too, could other mash-ups.
With Peacock left at 1.8 percent of all viewing time — in the same neighborhood as Tubi, a free streaming service owned by Fox — would it or its owner, NBCUniversal, need to make a move? Or would other companies consider combining their streaming services?
The answer: Very possibly yes.
“One of the central reasons for this combination of Warner Bros. Discovery and Paramount Skydance was to get the necessary scale needed in order to better compete,” Mr. Fishman said. “Other platforms without that scale need to reassess their strategy at how they’re going to try to compete with these larger players.”
Will it all be enough for Paramount?
The combined app would unite CBS series like “Tracker,” “Matlock” and “Survivor” with HBO fare like “The Pitt,” “The White Lotus” and “The Comeback.” The Taylor Sheridan hit, “Landman,” would be combined with “Game of Thrones” spinoffs. Movies like “Top Gun” and “Star Trek” would be brought together with “Harry Potter” and “Batman.” On top of that are all of the sports rights.
When the Max app was updated in 2023 after the merger of Warner and Discovery, executives believed that bringing together the rich library of scripted movies and TV shows of Warner Bros. with Discovery’s vast trove of reality series would create a can’t-miss, everything-for-everybody streaming app. That thesis failed.
Laurent Yoon, an analyst at Bernstein, said smashing them would “not be a game changer” by itself. He said the key would be continued investment, which is an unknown given that Paramount would have a debt load of roughly $79 billion. Mr. Yoon, however, did say that if the combined company wound up investing heavily in content, it could work.
“It does give them a fighting chance,” he said. “Without Warner Bros., Paramount would be going on this mediocre trajectory for a very long time. With this, it gives them a shot at greatness, some years down the line.”
John Koblin covers the television industry for The Times.
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