As Paramount, WB Discovery and Others Weigh M&A Options, Is More Consolidation Really the Answer to Hollywood’s Profit Problem?
variety.comShari Redstone’s Paramount Global is seen as having reached a grow-or-sell crossroads that has the potential to set other transactions in motion — the pinball effect when one sizable company puts the “For Sale” sign out. (For the record, neither Paramount Global nor Redstone’s National Amusements holding company has commented publicly on the matter.) The wave of speculation about the future of Paramount comes as the entertainment industry is working through a massive transition when it comes to the way movies and TV shows are produced, distributed and monetized.
The streaming services that represent the future for legacy media companies are still racking up billions of dollars in losses.
But what’s more concerning is that even if some of the newbie streamers make it to the break-even point, there’s no sign that they’re going to deliver the kind of profits that the studios once mined from sales of hit movies and TV shows. “No rational business can continue to lose billions and billions of dollars,” says one veteran media CEO.
This executive predicts a scenario in which Paramount and NBCU eventually pull back significantly on their investments in content for streamers Paramount+ and Peacock, respectively, with or without a transformative merger transaction.
Read more on variety.com