Peacock, Paramount+, and Max Should Merge Into One Streamer
A combined service could include NBC, CBS, HBO, Bravo, 'Yellowstone,' HGTV, NFL, NBA, the Olympics, and a mountain of first-run movies.
It’s becoming clearer to the owners of the major streamers and the consumers who subscribe to them that seven streamers — Netflix, Disney+, Prime Video, Paramount+, Peacock, Max, and Apple TV+ — is too many.
Netflix got to 300 million global subscribers by being an everything-to-everyone spigot of movies, comedies, dramas, reality shows, docuseries, international titles, standup specials, anime, children’s, wrestling, Christmas Day NFL games, and more more more. Disney+ is getting there, and Prime Video and Apple are parts of bigger service bundles.
Paramount+, Peacock, and Max have to get big or get out.
“The case for consolidation among the subscale platforms is clear, and such an outcome increasingly seems like an inevitability,” MoffattNathanson analyst Robert Fishman wrote in a recent research note. “The economics of streaming do not seem to work at the current scale of Peacock or Paramount+. They just might work if the two came together or in combination with Max.”
The biggest drag on a streamer is lack of engagement (how frequently the household uses the streamer) leading to churn (subscriber households leaving the streamer). Netflix became the first streamer to cross 300 million worldwide households by having something for everyone everywhere all at once.
Netflix is a database. That’s not a comment on quality; it’s a comment on quantity. Just scanning through the categories on my own, curated-for-me Netflix interface, I see 30-Minute Laughs, Critically Acclaimed TV Dramas, Retro TV, Blockbuster Movies, Reality TV, Limited Series, Drama Movies, Adult Animation, Golden Globes Nominees, Docuseries, Romantic Movies, Action & Adventure Movies, etc. Netflix has everything and a lot of everything.
Scale matters, and none of Peacock, Paramount+, or Max are on a path to having Netflix-level scale in the United States or globally.
So You’re Telling Me There’s a Chance?
The odds of a combined U.S. streamer — ParaCock Max, maybe? — are better than you might think:
Market Signals. Wall Street investors were bullish on streaming growth until 2022 when they became bullish on streaming profitability (and bearish on cable). In the two-plus years since, Netflix’s share price has soared while nearly all of its competitors share prices have fallen. The signal is clear: Netflix scaled its way to profitability, its competitors will have to do the same, and consolidation is the surest way for the subscale streamers to get there.
Global Scale. Sky/Peacock, Paramount+, and Max all have a patchwork of deployed, partnered, and licensed models depending on the market, and further consolidation would significantly streamline into a globally deployed streamer. For Comcast, that could mean exiting streaming altogether to focus on broadband, theme parks, content, and its theatrical business. For Skydance/Paramount and WBD, it could mean one highly deployed network instead of two smaller ones.
M&A Environment. The Trump administration has indicated it will be more favorable to mergers and acquisitions than the more antitrust-conscious Biden Justice Department and FTC were. The could mean Comcast or a merged Skydance-Paramount buying WBD. Also, Comcast’s spinoff of most of its cable networks into a new company later this year should prompt more realignment of media assets.
No M&A Necessary. Comcast, Paramount Global, and WBD could avoid outright mergers and take the joint-venture and licensing approaches that they’ve already taken in numerous non-U.S. markets:
In Australia, Foxtel’s Binge licenses first-run shows from WBD’s HBO and TLC (The White Lotus, Sister Wives), Comcast’s Bravo and NBC (Real Housewives of Beverly Hills, Chicago P.D.), and Univesal and Paramount theatrical films.
In 20+ E.U. markets, SkyShowtime is a joint venture that combines the catalogs of Comcast-owned Sky (the E.U./U.K. brand for Peacock) and Paramount Global-owned Paramount+ and includes Universal and Paramount theatrical films.
In the U.K., Sky Atlantic includes Sky originals (Day of the Jackal, Sweetpea, Gangs of London), HBO originals (House of the Dragon, The Penguin), and has an add-on option for Paramount+.
What Would ParaCock Max (😂) Look Like?
A streamer that combines Peacock, Paramount+, and Max would look like Netflix — huge catalog, new titles every day, lots of stuff coming and going — but with more emphasis on weekly shows, live sports, and a fairly constant drip of big movies.
The combined streamer should be organized more around interests (quirky comedies, scary movies, etc.) than around silos (HBO, Bravo), but the highly parochial media companies involved in the combined streamer will demand their silos.
There would be a lot of great silos, though — NBC, CBS, HBO, Bravo, CNN, The Olympics, NFL, March Madness, Universal, Paramount, and Warner Bros. An interface that drills in on user interests could be much more functional than the Disney+ interface that stubbornly shows you Pixar, Marvel, etc., whether you regularly watch those content brands or not.
Weekly Shows. A huge list of current shows — Suits LA, Chicago Fire, The Traitors, Southern Charm, 1923, Yellowjackets, Fire Country, Matlock, The White Lotus, The Pitt, Last Week Tonight, 90 Day Fiance — would all be streaming new weekly episodes on a streamer that’s the closest thing we’ve ever had to the cable bundle.
I’m persuaded that weekly release is a better model for building interest in TV shows than Netflix’s binge-drop model, and the combined streamer would likely put a big emphasis on weekly shows. The streamer would Netflix’s major competitor for scripted and reality TV.
Live Sports. The combined service would be a year-around sports streamer — NFL, NBA, college football, college basketball, The Masters, Premier League, The Olympics — and eventually a bidder on its on for FOX Sports and league packages that come available.
Along with ESPN Flagship — and assuming Fox Sports is available on one of them — the combined streamer would entirely or almost entirely replace cable for TV sports. That becomes a major competitive advantage over Netflix for sports households paring down to the most essential streamers.
Big Movies. Assuming Universal, Paramount, and Warner all continue the Pay 1 streaming deals with a combined streamer that they now have with their own streamers, the movie lineup will be a powerful advantage.
More than half of the 50 highest-grossing movies of 2024 would have made their streaming premiere on the combined streamer; only seven would have premiered on Netflix and all of them through its Pay 1 deal with Sony.
Would the New Streamer Rival Netflix?
The combined streamer would rival Netflix in distribution and content scale, and the differentiators of weekly shows, live sports, and especially big movies would give the service a very different look from Netflix, Disney+, Prime Video, and Apple TV+.
Peacock, Paramount+, and Max have big enough content properties and established enough audiences that bringing them together would remake the ecosystem around that core group of five global steamers with Apple TV+ as a significantly smaller fifth.
The big unknowns are whether the new streamer would have the independence from its constituent partners to take the big swings and make the content-category decisions that may favor one partner over another and whether corporate bigfooting would make the combined streamer impossible to assemble:
Would Comcast and WBD hand over their distribution to incoming Skybound leadership with little streaming experience?
Would Comcast rather buy WBD, exit the SkyShowtime partnership, and put the squeeze on Skybound?
Would a WBD streaming partnership with Skybound and a U.S. tie-up with Fox Sports put the squeeze on Comcast for over-spending on sports?
Netflix isn’t slowing down, so the heat is on Comcast, Skybound, and WBD to get competitive globally soon.