Comcast, Paramount Eye Merger Because The Streaming Sector Is Completely Out of Ideas

We've been talking a lot about how as streaming subscription growth slows, streaming companies will begin doing whatever's necessary to deliver Wall Street quarterly growth at any cost. Even if it cannibalizes longer term company health, customer satisfaction, and brand quality.

Just like the cable giants they disrupted, that generally means lots of prices hikes, weird new attempts to nickel-and-dime users (see: Amazon charging $3 extra to avoid ads that didn't exist previously), more restrictions (see: password sharing crackdown), lower quality content, more layoffs, worse customer service, and eventually, new obnoxious fees.

But it also means a lot of pointless, counterproductive mergers, designed primarily to goose stock under the pretense that mindless consolidation is innovative. You saw the mess that mindset created with the AT&T->Time Warner->Discovery series of mergers, and now - just as predicted - Comcast and Paramount are contemplating creating a Comcast/NBC/CBS/Paramount/Universal super union:

Paramount has held recent talks with Comcastabout joining forces in streaming through a partnership or joint venture, among several potential strategic options the entertainment company is pursuing, said people familiar with the situation."

Paramount's CEO has been talking about finding a merger partner for months after struggling to keep pace with Netflix. And Comcast's Peacock, despite having 31 million streaming subscribers, lost $2.75 billion last year alone due to mismanagement and content costs. The big four (ABC, CBS, FOX, NBC) have also been pressuring the FCC to eliminate what's left of media consolidation rules and let them merge.

These companies can't grow subscribers easily because doing the kinds of things subscribers actually like (lower prices, greater convenience, fewer ads, better content, better customer service) would chip away at Wall Street's desire for impossibly-unlimited quarterly growth.

So instead you get the financial equivalent of three card monte, where companies will mindlessly merge under the pretense that the consolidation creates vast and untold new synergies. But while the deals create a short term stock bump and tax breaks, it also saddles the companies with significant new debt and distraction, prompting even more price hikes, layoffs, and ever-sagging quality.

Most major media outlets - in many cases owned by the same billionaires that own streaming companies - often simply ignore the downsides of consolidation in coverage. They also adore hyping pre-merger hype, but rarely apply the same zeal to post merger layoffs, broken promises, or dysfunction.

That ensures, as we saw with the AT&T Time Warner Discovery mess, nobody learns anything from history or experience. This repeated enshittification process is just getting started in streaming, making it all but inevitable that once-innovative streaming companies look more and more like the despised cable giants they once disrupted. All in a never-ending quest for unlimited growth and unsustainable scale.