Image: Law and Order, NBC
In recent months, the media industry has been buzzing with discussions of mergers and acquisitions, particularly involving prominent players such as Warner Bros. Discovery, Comcast’s NBCUniversal, and Paramount Global. These media giants are searching for strategies to reduce expenses and remain competitive in a streaming market dominated by tech behemoths like Netflix, Amazon, and Apple, which boast significantly larger financial resources.
At the heart of these merger discussions is NBCU. Speculation about a potential merger with Paramount Global gained momentum when their joint European streaming venture SkyShowtime launched in September 2022.
Utilizing demand data from Parrot Analytics, we aim to delve into the potential impact of this proposed merger on the streaming industry. A merger between NBCUniversal and Paramount Global would unite two of the industry's most renowned content libraries. Corporate demand share assesses the long-term viability of the top media companies as they look to consolidate their original content’s availability exclusively onto their platforms, and can effectively help value a conglomerate’s legacy and library content in aggregate This merger would position the combined entity as the leader in the U.S. market's corporate demand share with a 21.8% share, surpassing Disney in 2023. This formidable library would merge Paramount’s beloved franchises, such as Star Trek and the Taylor Sheridan Universe, with NBCU’s highly sought-after sitcoms and procedural dramas, including The Office, and Law and Order.
Should Peacock and Paramount+ merge into a single app, this unified platform would become the second-largest in terms of total demand share — which is a good indicator of which platforms consumers may consider their streaming defaults — for its catalog of movies and TV shows, trailing only behind Netflix in the US. Moreover, the merged entity would feature an extensive film library, rivaling those of Netflix and Max, thanks to the contributions from Paramount Studios and Universal Studios, which are among the five biggest movie studios in the US.
Nonetheless, this merger faces several challenges. A significant concern is that both companies operate a major broadcast network (CBS and NBC) within the Big Four, necessitating the divestiture of one to comply with regulatory approvals. Beyond regulatory hurdles, the merger could further entangle the companies in the declining linear TV market. Additionally, the lack of a coherent international strategy for the unified platform, given its strong U.S. focus, presents another obstacle to the merger's success. Combined, Peacock’s and Paramount+'s share of global demand for streaming originals is 6.8%, fifth behind Netflix, Amazon Prime Video, Disney+, and Apple TV+.
