Warner Bros and Paramount in Hollywood merger talks to rival Netflix
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Warner Bros Discovery and Paramount Global are reportedly discussing a potential merger that could mount a challenge against Netflix and catalyse more consolidation in the streaming industry.
Bosses at the two Hollywood film studios behind franchises such as Top Gun and Mission Impossible met for several hours this week in New York to talk about a possible deal, according to US news site Axios.
The discussions are in their early stages and may not materialise into anything.
But if they did, a merger could allow the Warner Bros and Paramount’s streaming services, Max and Paramount+, to better compete against big rivals, Netflix and Disney+.
Analysts have said the merger would create a streaming business with the third-highest number of US subscribers and the biggest movie studio in Hollywood.
Shares of both Warner Bros and Paramount fell sharply on Thursday following the news.
Quilter Cheviot technology analyst Ben Barringer, said: “It (the potential deal) looks like a play for survival at all costs. Both businesses are heavily indebted and it is likely further debt will need to be issued to make this deal possible.”
It follows months of speculation about consolidation in the streaming industry that is struggling to match Netflix’s dominance.
The streaming giant recently added nearly 9m subscribers in its third quarter after it has clamped down on password sharing between households.