(Welcome to the “Most Important Story of the Week”, my bi-weekly strategy column analyzing the most important (but often not buzziest) news story of the last two weeks. I’m the Entertainment Strategy Guy, a former streaming executive who now analyzes business strategy in the entertainment industry. Please subscribe.)
The story that’s drawn my attention this week will likely put me out on a limb compared to many—maybe all?—the other media analysts and observers. When I read the coverage on anything Paramount Global or Skydance related, the common opinion is:
Paramount Global is a trash company of trashy trash. Also, they’re trash.
Is that too hyperbolic? Honestly, it doesn’t feel like it to me. Most of the coverage I read just wallops Paramount Global.
Now, I don’t want to reflexively defend Paramount/go against the conventional thinking. If a company has a bad strategy, I should call that out, and I should praise those companies with good strategies, even if everyone else agrees. But I see wayyyyyyyy too much herding in the pundit class. If everyone says “X”, it’s much easier to write or say, “I agree with X, here’s a slight twist” than to write, “You might have X completely wrong.”
After all, you could be wrong. With herding, there’s a chance that everyone’s wrong, and you don’t risk your reputation if everyone is wrong together. (Though the entire industry risks making collective mistakes…)
Today, I’ll go against the grain with Paramount Global. (Again.) I assume most of my readers are well acquainted with the downside case for that company, so instead I’ll talk about how the latest (very distasteful) news could portend a big new disruption for Hollywood. That plus a slate of new film incentives, Netflix’s and Microsoft’s video game travails, every streamer heading to France, Disney and Universal take on Midjourney, and more.
Let’s dive in.
Most Important Story of the Week – Paramount Settles The Trump Lawsuit, Clearing the Way for Their Merger
The news of the last week is that Paramount settled their case with Donald Trump, who had sued them for defamation. Most observers believed President Trump had a very weak legal argument, and Paramount settling with Trump likely upset 80 to 90% of my readership. And me!
This likely clears the way for the FCC to finally approve this merger. Now, that could still mean the actual close of the deal is months away, but at least it’s in sight. So, assuming it happens, I want to explore how Paramount+ could upend the streaming wars.
After all, we sometimes forget that Paramount has NOT been sucking over the last few years of the streaming wars. Apologies for the double negative, but I think that’s the proper way to describe it. Financially, the pivot to streaming smashed their balance sheet, but that’s par for the streaming course. (Netflix famously lost billions pivoting to streaming, too.) But Paramount Global does have the absolute leader in broadcast TV, a strong position in sports, and a movie studio pumping out annual hits (Top Gun: Maverick, Sonic the Hedgehog, Mission: Impossible).
Not only that, in the streaming wars, they’ve really grown over time, a fact many observers miss:
In some ways, for $8 billion, Skydance might have acquired an asset at rock bottom prices. And they could use that to disrupt the streaming wars.
But first…
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