Leading American entertainment corporations such as Walt Disney Co. (NYSE:DIS), Warner Bros Discovery Inc. (NASDAQ:WBD), Comcast Corporation (NASDAQ:CMCSA), and Paramount Global (NASDAQ:PARA) are reportedly battling enormous losses from their streaming services in the face of stiff competition from Netflix Inc. (NASDAQ:NFLX).
What Happened: As reported by the Financial Times, these established entertainment firms have incurred over $5 billion in losses over the past year from their online platforms. Consequently, they are facing mounting pressure to downsize or divest legacy businesses, restrict production, and minimize costs.
Paramount, guided by billionaire majority shareholder Shari Redstone, is allegedly considering a sale to production firm Skydance. Additionally, deliberations about a possible merger between Paramount and Warner are in progress, albeit still in preliminary stages with no certainty surrounding a deal.
Analyst Rich Greenfield characterized Paramount’s deal discussions as a reflection of the industry’s “complete and utter panic,” as per FT. He notes challenges such as falling TV advertising, accelerating cord-cutting, rising sports costs, and underperforming movie business, creating a scenario where mergers and cost-cutting appear to be the survival strategy.
Bob Iger, Disney’s CEO, hinted at a potential strategic shift, openly pondering whether some of ...