FOXA Jul 2024 34.000 put

Consolidation is a 'requirement' in the streaming industry

Paramount (PARA, PARAA) is reportedly looking to merge its Paramount+ streaming service with another platform after previous merger discussions failed to materialize in 2024. Third Bridge Group sector analyst Jamie Lumley and Manhattan Venture Partners head of research Santosh Rao join Market Domination to discuss what's next for the media giant. Lumley notes that Paramount+ trails behind other streaming competitors, the company might consider Warner Bros. Discovery (WBD) or Max as a "good partnership." Rao adds that consolidation has become a "requirement" in the sector as he believes it's necessary to scale. "As we think over the last few years, this streaming space overall has lost billions and billions of dollars. And it's clear that while there might be some companies here which can reach profitability, it is unlikely that all of them will be able to rebuild these streaming companies or these streaming businesses to offset, for the traditional media companies, the declining revenue and earnings that they had on the traditional linear businesses," Lumley says. He adds that bundling services is a way to retain customers and become profitable. Santosh believes that consolidation is "not going to be a threat" in the sector: "There's not going to be a monopoly of search. It's sustainability. And these companies will just not last. So I think it's going to be healthy for the industry." For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Melanie Riehl