Hi, this is Wayne again with a topic “Oh God, It’s Merging Again”.
Warner Bros and Paramount, maybe getting together. I talked about this man. This is scary for the entertainment industry like um, I ended up. I ended up being at least temporarily wrong when I said that the the the writers and the actors were just just not going to get a deal yeah, they ended up getting it done and, like Kudos man, that’s awesome, but this is what we’re looking at now. According to axios, the CEOs Warner Brothers Discovery and Paramount Global met this week for several hours to discuss a possible merger Warner.
Bros is currently valued at approximately 29 billion and Paramount Global. Approximately 10 billion Warner Bros is Cash positive, but has $ 40 billion in debt. While Paramount Global has 15 billion in debt and a negative cash flow, if an acquisition were to take place prior to April of this year, Warner Bros would take a substantial tax penalty due to provision ision that allowed its merger with Discovery. Last year, beyond their combined film and television distribution and IP, any potential merger might lead to the consolidation of CBS News and CNN.
Likewise, a combination of their three streaming services would allow them to better compete with Rivals like Netflix, but here’s the problem, their whole business model is disintegrating in front of our very eyes with cable. Uh. Excuse me with cord cutting um with the transition. That appears to be taking place towards piracy due to frustration, I think, with the with the endless mountain of streaming services that are competing for our attention, it’s ridiculous um! I I the there are some articles that I read about this, that cited The increased cost of production with the new deals um as something that’s putting pressure on these companies like.
That was the issue that I talked about with that negotiation, where I kind of went guys you’re asking for more money. But what money Paramount is bleeding Warner. Bros is okay cash flow positive, but has $ 40 billion in debt.
That’S not a sign of a healthy business, yeah um, it’s scary, Netflix is apparently still profitable. So that’s that’s something they. They have managed to weather the storm of everyone in their dog, trying to be the new Netflix and they are still the Netflix they added more subscribers.
I think this last I want to say quarter, I forget if it was quarter or month, but this last reporting period than they had at any time prior to the bump, that they got from covid interesting, and this seems to be down to the Crackdown on subscription. Sharing so Netflix is managing to make it work, but as far as I can tell pretty much, everyone else is just floundering with absolutely no idea how to create original content. That is comp telling enough to drive people to subscribe, and it’s uh. It’S kind of it’s kind of scary cuz.
I like movies, you know I kind of want there to be movies and TV, and it just feels like we’re on a collision course for the whole model, just not being feasible anymore yeah. I I I’m I’m sitting here. Thinking like, I wonder how people would react if there was a legitimate way of selling buy and own forever um that that wasn’t like giving people physical discs in physical stores that they don’t want to drive to um. But I mean, I think, that’s more or less been tried. Well yeah. I think people as much as people will scream about it.
Myself included no one’s other than uh dozens of us. No one’s going to do anything about it. So, like yeah, it’s tough. The people will burn everything they can um.
Rcm o24 says I think Disney is still going strong too. That’S a big negatory uh Disney plus has basically led to Bob chapek being pushed out of Disney uh. It was.
It was a disaster. They’Ve lost a ton of money on it, um no very bad, uh, um State killer says I don’t think the writers and actors are at fault that every movie costs a gazillion dollars now, no, not at all. That’S not what he was saying, but what I was saying was that they’re asking for more money and what I was saying was what money yeah these these services are not profitable.
These companies are struggling to figure out a way to to to run these Productions profitably and no that’s that’s not the actor’s fault, certainly not, but it means that the money they’re asking for just isn’t there. So that’s a problem right like when, like I I can absolutely see you know, an Amazon driver going well, Amazon’s posting record profits quarter after quarter. Why am I? Why am I struggling this way? 100 % there’s money there, so they should be getting some of it. But if there is no money, then that’s a fundamental problem. That’S something that everyone needs to come to the table and try and solve um. I don’t know I’m uh, I I I’m I’m an outsider here, like I’m sort of in the entertainment industry, like kind of like we make content, we make videos and you guys watch them, hopefully and like that’s great um and and a lot of the same pressures On that industry exist on us, you know, advertisers are, are pulling out on mass, like the the the advertising dollars are drying up, and you know we can see that it’s tough out there right like we’re. We’Re! Okay, don’t worry! You know you know we’re good we’re going to keep powering through everything and and that’s all, that’s all like cool um.
You know. Fortunately we are we’re, built leaner right, like our Productions, don’t cost that much and they aren’t underwater, but we definitely see the same pressures. We’Re aware of them is what I’m trying to say is YouTube profitable.
I don’t think anybody knows it’s a good question. Um yeah, I’m I’m not sure. If anyone knows, if YouTube is just like sort of a giant cash sync um data funnel or if it is a legitimately profitable business now, they’ve certainly made steps that seem like they’re trying to make it profitable, increasing the cost of Premium, pushing premium really hard um. You know making it so you can rent movies and TV shows through YouTube. There’S there’s excuse me, there’s lots that they’ve done. You know bu, I believe, lowering lowering right lowering default uh.
You know streaming resolution all that kinds of St all that all those kinds of things, but I uh I I don’t know I I don’t think anyone outside of Google’s top brass probably actually knows yeah moo uh running ads on non-monetized channels, so that they cannot profit Share yeah: that’s something B: .