Chapter 1: What recent acquisition is Paramount poised to make?
Paramount is, well, Paramount in the big Hollywood eat or be eaten saga. Dave Brancaccio in Los Angeles here. This is what stock market investors at least see as a win-win outcome. The studio Paramount Skydance stock is up more than 8% in pre-market trading now. after it's emerging the victor in the battle to buy rival Warner Brothers.
And Netflix stock is also up by the same percentage because it pulled out and won't have to pay all that money to Warner Brothers, an entertainment conglomerate that owns movie and TV studios, streaming outlets and cable TV channels, including CNN. Here's Marketplace's Nancy Marshall-Genzer.
Paramount Skydance is offering $31 a share for Warner Bros. Discovery. It's an all-cash offer, with much of the cash coming from Oracle founder Larry Ellison, the father of Paramount CEO David Ellison. Netflix declined to raise its offer for Warner Bros., saying, quote, "...the deal is no longer financially attractive."
Paramount's takeover of Warner Brothers still has to be approved by federal regulators. The Ellisons are close to President Trump, who said he would be involved in the outcome. Paramount would buy all of Warner Brothers, including CNN.
Chapter 2: Why did Netflix decide not to compete for Warner Bros.?
Trump said late last year that, quote, it's imperative that CNN be sold. I'm Nancy Marshall-Genzer for Marketplace.
As this deal comes together, Marketplace's Kristen Schwab has more on the state of streaming.
Right now, Naveen Sarma, a senior analyst at S&P Global Ratings, says streaming is complicated.
And a mess. And very confusing.
There are a zillion content providers accessed a zillion different ways, and subscription prices are rising. Sarma says 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.
There are too many players in the industry for all of them to make money. It's why Ross Benesch, a senior analyst at eMarketer, says more consolidation is coming.
Within the next two years, I think you're going to see more of these companies doing kind of what Sony has done.
Sony dropped the streaming side of its business, PlayStation View, to focus on licensing. We'll also likely see more subscription bundles and more companies, like Warner Brothers, get bought out. Benesch says this might make the user experience less clunky. It could also make it more expensive.
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Chapter 3: What are the implications of Paramount's acquisition for streaming services?
This is the Marketplace Morning Report from APM American Public Media.