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 Disney’s assets fit within the company. This speculation led to considerations of disposals, but as of now, no deals have materialized.
See Also: White House Declines To Overturn Apple Watch Ban: Analyst Estimates Impact At $300M Or More
Despite these hurdles, Netflix maintains its profitable position, distinguishing itself from competitors. The streaming behemoth recently witnessed its earnings exceed Wall Street predictions as it gained 9 million new subscribers, marking its most robust increase since early 2020.
Why It Matters: Experts have forecasted potential consolidation in the streaming sector as smaller services contemplate pooling resources or withdrawing from the competition.
This comes after major streaming services significantly increased their prices in 2023. In a battle for consumers’ time and money, companies have been investing billions in content. In fact, Netflix, the streaming leader,…
Click Here to Read the Full Original Article at Cryptocurrencies Feed…
