Paramount Skydance just beat out Netflix in a $111 billion bidding war to buy Warner Bros. Discovery.
Yes, the company that owns CBS, Nickelodeon, MTV, Comedy Central, Showtime and Pluto TV is swallowing the company that owns HBO Max, CNN, TNT, TBS, Batman and Harry Potter.
A massive corporate merger like this might sound like background noise. But when media giants consolidate, the shockwaves often hit the consumer.
I’ve watched telecom and media megadeals unfold for decades, and the promises of “better consumer experiences” almost never pan out. Instead, you usually end up with fewer choices and a lighter wallet.
Here’s how the Paramount and Warner Bros. Discovery marriage is going to impact your entertainment budget.
1. Expect your streaming bills to go up
Let’s look at the math. Paramount is taking on an astronomical amount of debt to pull this off. It’s paying $31 a share, assuming tens of billions of Warner’s existing debt, and borrowing heavily just to make the purchase. According to The Guardian, Paramount has lined up $54 billion in new debt just to complete the takeover.
All that debt has to be paid back. How does it do that? One way may be squeezing more revenue out of subscribers.
Right now, both Paramount+ and HBO Max are competing for your dollars. Once they’re under the same roof, that competition vanishes. You’re likely to see aggressive price hikes across whatever consolidated streaming platform they eventually launch.
We’ve already seen streaming prices creep up across the board over the last few years, and a merger of this size only accelerates that trend.
2. Say goodbye to cheap standalone services
Right now, you can buy Paramount+ or HBO Max separately, or you might even get one thrown in for free through your cellphone provider or a Walmart+ membership. Enjoy those perks while they last.
When media companies merge, they love to bundle. It makes their subscriber numbers look fantastic to Wall Street. You’ll likely see Paramount+ and HBO Max merged into a single, massive streaming app.
While having all your favorite shows in one place sounds convenient, it means you’ll be forced to pay a premium price for a giant bundle of content, even if you only care about watching “Succession” or NFL football.
They want to trap you in their ecosystem so you can’t cancel and rotate streaming bundles as easily as you can right now.
3. Less original content, more reruns
This is the hidden cost of corporate consolidation. When two massive studios merge, they look for synergies. In plain English, that means cutting jobs and slashing production budgets.
Before this deal, Paramount and Warner Bros. were fighting against each other — and against Netflix — to win your attention by greenlighting fresh, high-quality movies and series. With one less major competitor in the market, the newly formed giant doesn’t have to try as hard.
You’ll probably see fewer risky, original shows being produced. Instead, the new company will lean heavily on milking existing franchises, endless spin-offs, and reality TV because those are cheaper to make and carry less financial risk. You’ll be paying more per month, but getting fewer new, original stories for your money.
So, what should you do right now? Keep a close eye on your credit card statements. Audit your streaming subscriptions this weekend. If you’re paying for services you don’t use every week, cancel them before the post-merger price hikes kick in.
