In our streaming wish list for 2024, my top request was a Peacock or Paramount Plus merger, preferably with each other. So when news broke that the two streaming services were in talks to merge as recently as February 16 (h/t The Wall Street Journal), I started to get excited that my wish was coming true.
Granted, this isn't the first time Paramount has been tipped to merge with another company. The media company is going through a rough time right now and Warner Bros. Discovery and Paramount were tipped to merge back in December to try and fix financial problems at both companies. That merger is off the table entirely now according to CNBC. possibly because no merger involving Warner Bros. Discovery can happen until April of this year.
So now, attention has shifted to a potential Peacock and Paramount Plus merger. The two companies have discussed "joining forces in streaming through a partnership or joint venture, among several potential strategic options."
If they can figure it out, that could result in one less streaming service we'll need to pay for in a given month. But that's a big if.
The case for a combined streaming service
These two streaming services simply don't provide enough value on their own to merit signing up for them and paying full price. I only have Peacock for Premier League live streams and even then I have it because I have Xfinity internet. I don't pay for it a la carte. And I don't have Paramount Plus, which doesn't even make our list of the best streaming services.
I'd argue that the establishment of a real fourth contender in the streaming wars to compete with Netflix, Max and Disney Plus actually improves competition rather than hurts it.
But if these two streaming services were combined? Now we're talking. That would create a streaming service with NBC Sports and CBS Sports, the two sports networks notably absent from the ESPN, Fox and Warner Bros. combined sports streaming service that was recently announced. It would also combine Comcast and Paramount's vast studio libraries of TV shows and movies, rivaling offerings from Max and Netflix.
In short, it's the best solution from a content perspective for consumers, even though consolidation could create an opportunity for further price increases due to decreased competition. I'd argue that the establishment of a real fourth contender in the streaming wars to compete with Netflix, Max and Disney Plus actually improves competition rather than hurts it.
Unfortunately, though, this could all be a moot point due to a regulatory hurdle these two companies might not be able to overcome — they both own broadcast networks.
Regulatory hurdles could kill a Peacock deal with Paramount Plus — unless they get creative
Currently, Peacock is owned by Comcast, which also owns the NBC broadcast network. Similarly, Paramount Plus is owned by Paramount Global, which owns the CBS broadcast network.
And this makes it virtually impossible to merge the two companies as they're currently constructed. According to the Federal Communications Commission (FCC), "FCC rules effectively prohibit a merger between any two of the big four broadcast television networks: ABC, CBS, Fox, and NBC."
That hurdle is not going away and an exception is not going to be made. Anything is possible ... except that. The companies know it too. There's simply no way that Comcast and Paramount merge and maintain ownership of NBC and CBS. And with the way the two companies are trending, Comcast holds a much stronger position, so it's CBS that would likely be on the chopping block.
"FCC rules effectively prohibit a merger between any two of the big four broadcast television networks: ABC, CBS, Fox, and NBC." That hurdle is not going away and an exception is not going to be made. Anything is possible ... except that.
But these companies don't need to merge fully for a Peacock and Paramount Plus merger to work. Paramount could very well easily be sold for parts if (when) it's eventually sold. CBS could be sold as a separate entity, with or without other Paramount TV networks — an offer was made to buy BET as recently as last year. Get rid of the broadcast network, and Comcast has one less hurdle to taking over Paramount Global's studios and Paramount Plus.
A partnership or joint venture similar to what Hulu was before Disney took sole ownership of the streaming service could also work. Comcast and Paramount even already have a version of this in Europe called SkyShowtime.
My solution? Comcast and Paramount should spin off Peacock and Paramount Plus into a separate entity with separate leadership and license their content to the new entity. Paramount Global CEO Bob Bakish just said he expects Paramount Plus to be profitable by 2025 (h/t Marketwatch). If Peacock projects similar profitability, then such a new company could actually be self-sufficient.
This eliminates the two companies competing with each other as they try to run a joint streaming service. It also allows a private buyer to take over Paramount while still keeping the streaming services combined and for Comcast to potentially merge with Warner Bros. Discovery.
While I don't want that last part to happen, from a business perspective it makes more sense for Comcast to try and merge with Warner Bros. Discovery than Paramount. But from a consumer perspective, I still want Peacock and Paramount Plus to merge more than any other streaming service consolidation. And that's only going to happen if these two companies get creative.
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