Paramount and Max plan merger to take on Netflix

A Paramount evaluates potential partners for a merger with Max (antiga HBO Max) at the top of the list. The goal is to forge a service of streaming comprehensive and powerful, capable of facing giants like Netflix e Disney+, who joined Star+ in June.

According to the well-known website The Vergesources indicate that David Zaslav, CEO of Warner, expressed interest in the partnership with Paramount, negotiating with Bob Bakish, CEO of the company, in late 2023. However, as of January of this year, the agreement has not been completed.

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While considering Max, Paramount is also exploring technology partnerships, as Chris McCarthy, the company’s co-CEO, mentioned in a June 25 meeting with employees.What they don’t have is our content scale, and together we will make a very powerful combination to generate more minutes and greater revenue.“, he stated.

A successful partnership between Paramount and Warner Bros., which owns Max, could enrich programming and retain subscribers. It also promises to strengthen the finances of both corporations.

In February 2024, Warner Bros. shares fell 10% after earnings missed analysts’ expectations, adding to a 47% drop in 2023. Max has about 100 million global subscribers, with 52.7 million in the U.S. Paramount+ reached 71 million subscribers in the first quarter of 2024.

For perspective, Netflix has 260 million subscribers worldwide, with an increase of 13.1 million in 2023. According to a report by Justwatch, Netflix leads the SVOD (Subscription Video on Demand) market with a 26% share, equivalent to the sum of Disney+ and Max.

Paramount’s search for a partner reflects a view shared by industry experts: the market is saturated with streaming services compared to the number of paying consumers. It is expected that only four or five platforms will survive, while the rest are expected to be absorbed.

The fate of Paramount+ remains uncertain, but in addition to seeking mergers, the brand may choose to license its content, a strategy already adopted by Disney and Warner Bros. with Netflix.