What Paramount's Warner Bros. deal could mean for streaming

The path to owning Warner Bros.-Discovery has cleared up for Paramount Skydance. That's because Netflix is ending its pursuit. How this deal ultimately shakes out will change the streaming landscape, and it’s happening at a time when companies are fighting for market share and trying to prove they can be profitable.

Streaming is complicated, said Naveen Sarma, managing director at S&P Global Ratings. “And a mess, and very confusing.”

There are many content providers, accessed many different ways, and subscription prices are rising. Sarma said viewers are starting to pick and choose. 

“You’re seeing consumers binge-watch stuff that they find interesting and then drop that service for a short amount of time. You’re seeing seasonality with the services that have the NFL,” he said.

There are too many players in the industry for all of them to make money. It’s why Ross Benes, a senior analyst at eMarketer, said more consolidation is coming.

“Within the next two years, I think you’re going to see more of these companies doing what Sony has done,” Benes said.

Sony dropped the streaming side of its business, PlayStation Vue, to focus on licensing. More subscription bundles and companies, like Warner Bros, could get bought out. Benes said this might make the user experience less clunky — it could also make it more expensive.

“Like, let's say you have all of the Paramount and Warner shows on one platform now instead of two. That's nice for consumers, but when you have fewer companies, you give more monopolistic power to those who are still operating,” he said.

Mergers would also give combined companies more power over the kinds of movies and shows that get made.