What the Warner Bros. and Paramount Merger Means for the Entertainment Industry

The movie industry is changing with the merging of two well known media and entertainment companies. On April 23rd, Warner Bros. Discovery shareholders went ahead and approved the sale of their company to Paramount Skydance after a bidding war between Paramount and Netflix. Back in December of last year, Warner Bros. was in negotiations to sell their company to Netflix which did not go over well with Paramount. After it was announced of the proposed sale, Paramount entered into a bidding war with Netflix to try and outbid them. While Netflix would buy the company for about $28 dollars a share, Paramount countered with a price of $31 dollars share. Ultimately Netflix couldn’t match this price with Paramount securing the deal.  

What does this mean for the entertainment industry? At the moment, not much is expected to change it as it has only been a week since the deal was approved. Paramount Skydance anticipates for the deal to close in their third quarter, meaning the two companies are still operating separately. In the future though, the merging of these two companies can have serious ramifications for other companies in the industry. 

Currently, Netflix is the top streaming service globally with Amazon Prime Video and Disney Plus trailing after. This merger is raising concern between competing companies as with Paramount and Warner Bros. Discovery combining, they can decide to create a single unified streaming service. Individually, each company owns an extensive amount of television networks with Paramount owning the CBS Network, Nickelodeon, MTV, Showtime, and Warner Bros. Discovery owns HBO, CNN, TNT, among others.

A major question for consumers with this merger is how much will the companies charge for a service that offers a multitude of channels and is also actively putting out content throughout the year from films to tv series. For the entertainment industry, another concern would be the potential financial impact for the movie studios under these companies. Right now in the age of streaming, we're seeing theatrical releases of films lasting only about a month before they are put on streaming services for consumers to view at home. While it’s convenient to have films be on streaming services, the revenue generated from it is different from what studios receive from films being shown in theaters. Moving forward, Warner Bros. Discovery and Paramount need to think how this merger will affect not only consumers, but workers in the entertainment industry.