WBD, Paramount: A marriage made in heaven?

Since before Christmas, there have been rumours circulating about the future of Paramount Global. We know it’s up for sale but we’ve yet to find out who the favourite is to acquire. There’s been speculation of a merger with Warner Brothers Discovery (WBD) – two behemoths in the entertainment world – after reports that the leaders of both businesses were in secret discussions. At the time of writing, this still looks to be a real possibility and one we want to dissect as to how it could affect the fast-evolving streaming landscape.

A potential merger between the two entertainment companies is not unsurprising. Both have heavy debt burdens (although WBD has made progress in paying back what it owes already). It is also symptomatic of the current dysfunction in the streaming market – a result of too many subscale streaming services competing for subscribers with a relatively narrow content offering and years of overspend on production and platform costs.

You’ve only got to look at recent stories about Amazon Prime and its MGM studios announcing redundancies to cut costs. Meanwhile, Amazon has also joined the likes of Netflix and Disney+ in introducing an ad tier to generate a new revenue stream.

A merger of this kind, should it happen, is quite significant for media watchers. It would combine two of the ‘big five’ Hollywood studios and establish a more profitable business model that is less reliant on bundles. It would also consolidate two streaming services. This has the potential to create one heavyweight that could realistically rival bigger players in the market.

But the path to success is not easy. And one of the biggest challenges would be in managing content expectations.

A merger of two studios would be good news for the end-user. It would bring together two enormous catalogues of iconic titles and brands, from the content streamed currently on Max through to well-known franchises such as Mission Impossible and those from DC Comics. This means more quality content with a longer lifespan – a key driver in gaining and maintaining subscribers.

Could the potential merger between WBD and Paramount be Mission Impossible?

WBD and Paramount are brands with enormous legacies and star power. And while they both have strong and recognisable film franchises, any new content has got to live up to the legacy brands and audiences’ expectations – and, more importantly, compete with savvy competitors in the market.

Netflix, particularly, is well known for its huge content spend and approach to investment. It has pivoted away from shows that aren’t performing and focused on flagship series like The Crown and Stranger Things. Moreover, its latest deal with WWE Raw is significant. It shows the need for OTT platforms to diversify their content to maintain and build on their user base, and Netflix is setting the bar even higher for others to compete.

As a business that works a lot in this space, one of the biggest customer pain points, our clients often tell us, is browsing and finding the content they want to watch. Most consumers search directly for what they are looking for rather than being guided by the different brands and sub-brands.

The only anomaly in this is Disney, which has such recognisable brands that it works in its favour to use these to help audiences navigate Disney+, as they know many subscribers are only looking to watch Star Wars or animated content.

However, WBD and Paramount are not quite on this level. The average consumer is unlikely to know what brands or content fall under Warner Bros or Paramount. With this in mind, any new platform should lead with the strength of the content, rather than let any brand do the talking.

Content may capture and retain subscribers, but the digital experience should never be neglected. Both WBD and Paramount have established streamers and any combined service should bring the best learnings and offerings from both platforms (Max and Paramount+) in terms of search, navigation and discoverability.

Customer-centricity must be at the heart of any user experience. This includes factoring in the needs of different customers. This includes children, ensuring there are rigorous password or tech-enabled protections so that any child browsing the platform is not able to bypass age restrictions.

Moreover, today users are switching between different platforms, from smartphones through to smart TVs or via other streaming devices. Customers want a like-for-like experience across devices and to pick up where they left off. It’s therefore imperative that cross-platform performance is seamless for the end-user. Anything less than this is a hassle and a disappointment.

Many reports show that customers are looking for more personalised experiences – content streaming services are no exception. WBD and Paramount would have a mountain of content for customers to indulge in. But tailoring this to different times of the day would help to get the most out of it.

Early morning commuters on an hour-long train journey are probably less likely to opt for a horror film, preferring something shorter and more lightweight or factual to get them in the mood for the working day. But it’s a different story when at home and settled in front of the TV. Customers may be more inclined to watch something longer, so suggested content should be curated to suit those needs.

At the time of writing, we do not know whether the rumours of a merger between these two entertainment companies will develop into anything beyond initial discussions. However, the prospect of it is intriguing because it has the potential to disrupt the entertainment sector – and particularly the established streaming landscape.

A merger is a highly complex situation and I have only scratched the surface here in terms of how the combined businesses could navigate a future content strategy and digital experience. It has left us all on a perfect cliff-hanger. And I just can’t wait to see what happens next.

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