Congrats, Paramount. You’ve succeeded in snatching Warner Bros. away from Netflix. Now what?
So far, Paramount hasn’t laid out much of a plan for Warner, aside from somehow mashing HBO Max and Paramount+ into one streaming service. Its press release mostly extolls the value of getting bigger for shareholders, while viewers seem to be an afterthought. (The deal is still subject to regulatory approval and a vote by Warner shareholders.)
All of which leaves us with a lot of unanswered questions about how the merger will affect the folks who actually watch Warner and Paramount programming. In its zeal to embiggen itself, has Paramount thought through any of this?
Which app will survive?
Compared to the HBO Max app, Paramount+ can be borderline unbearable, especially on low-power devices where its interface is prone to skipping and lagging. Users constantly complain about the app’s quality, and MakeUseOf’s Dan Selcke recently found that loading Paramount+ and getting into a show took 1 minute and 15 seconds on his smart TV, 33 seconds longer than HBO Max.
You might think it’d be obvious which app to build on for a combined streaming service, but Paramount’s press release doesn’t say which way it’s leaning. It merely mentions “consolidating streaming technology stacks” as a way to save money.
Either way, expect a mess. When Warner rebuilt its Max app on Discovery’s tech stack in 2023, it had all kinds of issues and missing features that took years to clean up.
What happens to HBO?
“HBO should stay HBO,” Paramount CEO David Ellison said this week, suggesting that the brand will stick around and operate with some autonomy. But will HBO stay front-and-center on a combined service, or will it be relegated to some seldom-visited section on a Paramount+ home screen?
We’ve already been through one round of big-brained TV execs mistakenly thinking the HBO brand doesn’t matter, with HBO Max rebranding as “Max” in 2023, then reversing course two years later. An unnamed source told CNBC that HBO is “likely to be a sub-brand within the larger service,” suggesting that Ellison could make the same mistake.
How will pricing and packaging work?
HBO Max costs $11 per month with ads, $18.49 per month with ad-free programming and live sports, and $23 per month for 4K video. Paramount+ costs $9 per month with ads, or $14 per month for ad-free viewing, Showtime programming, and a live CBS feed. Good luck reconciling all of that into one service that people will actually want to pay for.
Among the things Paramount will need to figure out: Whether to charge extra for Showtime and/or HBO, whether to charge extra for 4K, and how to partition sports programming. It will need to do all that while landing on prices that are still competitive with other streaming services. Given that HBO Max’s standard plan already costs more than Netflix—by far the more-watched service—there’s not much breathing room.
How is sports streaming going to work?
HBO Max’s ad-free tier currently offers all the live sports programming that airs on TNT, TBS, and TruTV. But prior to the Paramount deal, Warner had been planning to break off that sports coverage into a separate “TNT Sports” service. That plan is likely off the table now, as Paramount wants sports to play a big role in its combined streaming service.
Still, streaming services are increasingly trending away from making everyone pay for sports. Disney offers a bundle of Disney+ and Hulu without ESPN. Peacock offers a cheaper “Select” package that excludes its sports coverage. DirecTV now offers various live TV packages without sports channels, and YouTube TV is doing the same.
Requiring an ad-free plan for live sports seems counterintuitive, yet both Paramount+ and HBO Max do this today. A combined service could provide a much-needed reset, or it could just make live sports even more expensive to access.
What happens to Discovery+?
Ellison has indicated that Paramount and Warner Bros. will combine all their streaming services into “one platform,” but it’s unclear what that means for Discovery+. Will it still be available as a separate subscription within Paramount’s app, or will existing subscribers have to upgrade to a more expensive service?
This isn’t the first time the future of Discovery+ has been in question. When WarnerMedia and Discovery merged in 2022, the original plan was to shut down Discovery+ in favor of HBO Max. The company then reversed course, not wanting to risk 20 million subscribers to a service that, unlike HBO Max, was actually profitable. Will Ellison and company come to the same realization?
What’s the timeline for all this?
Paramount expects the Warner deal to close in the third quarter of this year. This assumes Warner’s shareholders vote in favor and regulators allow it, neither of which are givens.
That means HBO Max won’t see any changes until at least the fall, but realistically it’ll take a lot longer. For reference, WarnerMedia and Discovery completed their merger in April 2022, and the rebranded Max app built on Discovery’s tech stack arrived 13 months later.
The merger of Paramount and Warner Bros. Discovery, if it happens, will be even more complicated given the size and scope of both companies. Yes, Paramount will have achieved the goal of getting bigger for bigger’s sake. But does it even understand what it’s getting into by doing so?
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