One of Hollywood’s oldest companies, the entertainment giant Paramount Global, has agreed to merge with independent film studio Skydance Media, creating a group worth $28 billion, says Peter Hoskins on the BBC.
As part of the “complex” deal, Skydance will pay $2.4 billion for National Amusements, owned by non-executive chair Shari Redstone. It holds just 10% of Paramount Group’s shares, but accounts for almost 80% of voting rights. It is the “end of an era” for the Redstone family, which “transformed a chain of drive-in cinemas into a vast media empire”.
No wonder Redstone is throwing in the towel, says AJ Bell’s Russ Mould. The stock has fallen by 78% in five years, while rival Netflix has gained 85%. The problem was Paramount’s “big gamble” on the streaming sector, with its Paramount+ platform “failing to gain the kind of traction enjoyed by Netflix, Amazon Prime Video and Disney+”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
With streaming platform owners now focusing on making a profit on their services, rather than just building up market share, Skydance “will have to think long and hard about Paramount Plus’s future” if it wants to bring a sense of “sparkle” to the company.
Given that Paramount+ is “haemorrhaging money while reaching approximately a quarter of Netflix’s 270 million subscribers”, says Jennifer Saba on Breakingviews, completely ditching the “subscale, expensive direct-to-consumer strategy should be on the table”.
The focus should be on partnerships, with Paramount and “much-better-equipped Goliath” Comcast already in talks about streaming jointly. Selling content to other streaming services should also be explored.
The deal highlights that the post-Netflix era has been a “costly bust for the stragglers of media, like fellow family-controlled pipsqueak AMC Networks or even Warner Bros. Discovery”.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
-
Are you one of 15 million people at risk of retirement poverty?Two-fifths of people in the UK aren’t on track for a minimum lifestyle in retirement, new data shows. Are there steps you can take to boost your pension?
-
150 banking hubs now open across UK – is there one near you?As the 150th banking hub opens its doors, a Post Office deal that offers basic banking services has also been extended until 2030. We explain what this means for you
-
Unilever braces for inflation amid tariff uncertainty – what does it mean for investors?Consumer-goods giant Unilever has made steady progress simplifying its operations. Will tariffs now cause turbulence?
-
Two ways to tap into monopoly profits from airportsMost investors can’t get their hands on airports. Here are two ways you can
-
Fat profits: should you invest in weight-loss drugs?The latest weight-loss treatments could transform public health and the world economy. Should you invest?
-
How investors could profit from Ramsden Holdings' four-part growth strategyRamsdens Holdings offers a diversified set of financial and retail services and a juicy yield, says Dr Michael Tubbs
-
How to invest in the booming insurance marketThe insurance sector is experiencing rapid growth after years of stagnation. Smart investors should buy in now, says Rupert Hargreaves
-
Out of America's shadow: Why Trump's tariff chaos may be good for non-US stocksOpinion Upending global investment and trade could benefit other countries at the expense of the US market, says Cris Sholto Heaton
-
BP's 'long, painful decline' – and why next year could be even tougherOpinion Long-suffering shareholders in oil giant BP have been pushing for change. It won’t come soon enough, says Matthew Lynn
-
Investment trusts tap the profits in exotic and obscure global marketsOpinion Peter Walls, manager of the Unicorn Mastertrust fund, highlights three investment trusts as he shares where he'd put his money
