Warner and Paramount to merge?

[Frank Cox]

https://www.cnn.com/2023/12/20/media...ger/index.html

Warner Bros. Discovery and Paramount CEOs discuss possible merger
By Oliver Darcy, CNN
2 minute read
Updated 5:12 PM EST, Wed December 20, 2023
Warner Bros. Discovery Chief Executive David Zaslav met on Tuesday with Paramount Global Chief Executive Bob Bakish, and they broached a potential merger between the two companies, two people familiar with the matter told CNN.
A potential merger of the two media giants would create an entertainment and news juggernaut, encompassing Warner Bros. and Paramount studios as well as CBS, CNN, and other cable television assets.
The discussion over lunch, which was first reported by Axios, took place at Paramount’s global headquarters in New York City’s Times Square.
Spokespeople for Warner Bros. Discovery and Paramount declined to comment.
While a potential merger between the two studios could once again upend the media industry, the talks aren’t a complete surprise. Zaslav, who executed a number of acquisitions at Discovery, has talked in recent months about going shopping for additional assets to boost Warner Bros. Discovery’s content offerings.
Meanwhile, Paramount is in need of a strategic partner to survive in the current media landscape. Shari Redstone, the family heiress of Paramount’s parent company, National Amusements, has reportedly been in talks to sell her stake in the company.
Analysts expect consolidation in the media business to continue as legacy entertainment companies bulk up in their efforts to compete with tech titans in Silicon Valley, which are increasingly wading into the content space.
Investors weren’t happy, though: Warner Bros. Discovery’s (WBD) stock fell immediately after Axios published its report and ended the day down 5.7%. It fell another 1.4% in after-hours trading. Paramount’s stock rose initially on the report but was a little less than 1% lower after hours.

So one less movie company.... again?

[Mike Blakesley]

It's all driven by one thing -- how the hell can we make money on the streaming thing?

They'll probably all be owned by Amazon and/or Apple eventually.

[Frank Angel]

How come its never about making better movies, but always how much bigger can we get to, as Mike says, make more money? They'll merge, then Disney will buy them.

[Tony Bandiera Jr]

They don't need to merge to be "strategic partners" (which sounds like a gay hookup...and no, I am not gay bashing, those of you who know me know why) so I will shout out this next bit:

PARAMOUNT AND WARNER BROS, LISTEN UP:

HEY ZASLAV AND BAKISH: WHY DON'T YOU GUYS FOCUS ON WHAT REALLY MATTERS, LIKE, OH, I DON'T KNOW, FINDING WRITERS AND DIRECTORS TO COME UP WITH SOME NEW, UNIQUE FRESH IDEAS FOR MOVIES INSTEAD OF ENDLESS REBOOTS AND SEQUELS? WE THE PEOPLE ARE SICK AND TIRED OF THE ENDLESS STREAMS OF SHIT COMING OUT FROM YOUR STUDIOS!

AND SPEAKING OF STREAMING, WAKE THE HELL UP. YOU WILL NEVER, EVER, RECOUP AS MUCH FROM ONLINE ALONE AS YOU WOULD FROM WIDE THEATRICAL RELEASES WITH REALISTIC WINDOWS OF 4-6 MONTHS OR MORE.

YOUR BOTTOM LINE WILL THANK YOU.

MAKE THE CINEMA EXPERIENCE GREAT AGAIN!

[Bobby Henderson]

I guess the "strategy" here is to create enough of a monopoly so they can hike the prices of streaming service subscriptions and one-off rentals, supposedly to make more money (or lose less money).

The problem with that monopoly ploy: people still have far more choices of entertainment than they did in the past. People are "consuming" entertainment in less conventional ways too, such as videos uploaded to YouTube, TikTok, etc. They have their video game consoles, social media, free porn sites, etc. Even if every major Hollywood studio merged into one entity there would still be lots of other choices of entertainment.

Let's not forget about the other issue that many adults don't have a lot of spare time to waste watching movies, TV shows, etc. Some of us are working longer hours, working multiple jobs or doing "side hustles" (which is easier with the boom in remote working). A fitness routine will eat a lot of time that would have otherwise been wasted in front of a TV screen. My brother spends a lot of his free time fixing up vehicles and selling them.

Media companies like Warner Bros and Paramount have to do more to attract attention from viewers than just merging (and hiking prices). They have to make better, more original movies and TV shows. And, yeah, they need to contribute to making the movie-going experience better. Right now the movie studios are pushing cinemas to the brink of ruin. If the cinemas disappear those movie studios will be screwed. They'll be little more than creative departments of TV networks.

[Lyle Romer]

I guess the "strategy" here is to create enough of a monopoly so they can hike the prices of streaming service subscriptions and one-off rentals, supposedly to make more money (or lose less money).

The problem with that monopoly ploy: people still have far more choices of entertainment than they did in the past. People are "consuming" entertainment in less conventional ways too, such as videos uploaded to YouTube, TikTok, etc. They have their video game consoles, social media, free porn sites, etc. Even if every major Hollywood studio merged into one entity there would still be lots of other choices of entertainment.

Let's not forget about the other issue that many adults don't have a lot of spare time to waste watching movies, TV shows, etc. Some of us are working longer hours, working multiple jobs or doing "side hustles" (which is easier with the boom in remote working). A fitness routine will eat a lot of time that would have otherwise been wasted in front of a TV screen. My brother spends a lot of his free time fixing up vehicles and selling them.

Media companies like Warner Bros and Paramount have to do more to attract attention from viewers than just merging (and hiking prices). They have to make better, more original movies and TV shows. And, yeah, they need to contribute to making the movie-going experience better. Right now the movie studios are pushing cinemas to the brink of ruin. If the cinemas disappear those movie studios will be screwed. They'll be little more than creative departments of TV networks.

At some point these conglomerates will have to realize that their pricing power for streaming is very limited. People have been conditioned since Napster and then iTunes that streaming things should cost next to nothing.

Maybe one day they will realize that if they want to maximize the profit on movies the way to do that is to "turn back the clock" and treat movies like they used to be centered on an exclusive theatrical release with a long window and "home video" as more of an afterthought.

If there are quality movies to see a person might purchase tickets to several each month to view in a theatre. That same person will only pay the cost for a streaming service once per month. The potential revenue for each viewer is capped with any subscription service and all investment in content is mostly to keep subscribers from cancelling. With theatrical releases, there is opportunity to multiply the revenue from every viewer.

Back in the late 90's/early 2000s, I could find a movie worth the time, effort and cost to see in a movie theatre almost every week. Now, it's maybe 4 times a year that one meets those qualifications. There are times that my wife and I WANT to go to a theatre but can't find anything playing that we are interested in spending the time to see and the effort to drive to see it. It's such an infrequent event that the cost isn't even really a consideration and I'd happily pay $8 for a popcorn as part of an enjoyable afternoon or evening out. It's the quality of the product on the screen that keeps us from being frequent movie goers.

[Mike Blakesley]

People have been conditioned since Napster and then iTunes that streaming things should cost next to nothing.

What is it with people being "conditioned?" How about "re-conditioning" them to realize that the first condition was wrong?

After all, people got "conditioned" (thanks to HBO Max and WB) that movies would come out on streaming and theaters the same day, and everyone said that once day and date happened, it was all over, there was no going back. But we HAVE gone back, to an extent.

People can be educated. The real, and saddest, problem is that movies have been devalued.

[Bobby Henderson]

Movies and recorded music have been greatly de-valued. But it would take a whole lot more than a public awareness campaign to make any dents in the current down-hill trend line.

This process has taken place in a generational manner, starting back at the end of the 1990's. That's when movie studios started really playing around with reducing the window between a movie's theatrical debut and when its retail DVD arrived on store shelves. The Matrix was an early example. The movie debuted nationally 3-31-99; the DVD hit store shelves on 9-21-99 -just under 6 months from the theatrical debut. The DVD was also priced unusually low; I think I paid $16 for it. Warner Bros raked in a ton of money from the cinema release and sold a ridiculous number of DVDs.

Ever since then the freaking bean counters have been screwing around with the sales formula to speed up the process in an attempt to make more money. The only thing they have done is horribly reduce the sell-able life span of a movie. The "shelf life" of modern movies now is incredibly brief.

I can easily remember lots of movies I saw in theaters and home video during the 1980's and 1990's. I have far more trouble remembering movies that were released just within the past 10 years.

One of the biggest problems is movies have very little physical retail presence anymore. Video rental stores have all disappeared. Stores that sold books, movies and music on physical media are nearly extinct. Those were all brick and mortar venues that would remind anyone various movies still existed. Most of that stuff is sold online via sites like Amazon. Stores like Walmart and Target carry a pretty limited selection on just a couple shelves. In many communities the commercial cinema gives a movie it's biggest visual sales push. A growing number of smaller towns and cities are seeing their cinemas disappear.

A lot of younger adults and teens have grown up using apps like iTunes and Netflix to get movies and music. The apps don't have anything equivalent to a retail store shelf where something can accidentally catch your attention. You almost need to know what you're looking for before launching the app. In that kind of environment it's easy for a movie less than a year or two old to be over-looked.

These streaming apps do make it easy for content to seem very cheap. I have a 3 month free trail of Amazon Music Unlimited. It costs $10 per month after that. Virtually any music I can think of can be streamed in quality levels near or equal to music CD. Why bother buying CDs if you have access to something like that?

It makes perfect sense for the media company executives and movie studio bosses to re-group and throw their efforts behind theatrical releases again. But they don't want to do that. These bean counters, with their private equity firm mindsets, are doubling down on this short term thinking shit. I have a feeling it's going to take one or more of these big movie studios dying off and the whole movie industry going into crisis mode before they consider steering the Titanic in a different direction.