Sony, Paramount Explore Merger As Streaming Sector Runs Completely Out Of Original Ideas

As the streaming sector has consolidated and new subscriber growth has slowed, it has increasingly started chasing the bad habits of the industry it once disrupted: cable TV. Gone is stuff like encouraged password sharing and risk-taking programming. In its place is endless price hikes, weird efforts to nickel-and-dime users, lower-quality programming, annoying new consumer restrictions, and layoffs.

One of the favorite tweaks of sectors that have run out of ideas is consolidation and megamergers. Such deals almost always result in layoffs, lower-quality product, large debt loads, price hikes, and consumer dissatisfaction. But such deals also goose stock price, generate big tax breaks, and let fail-upward brunchlord executives put savvy big boy dealmaker" on their resumes, so they continue apace.

As predicted, with the streaming sector all out of fresh ideas and Wall Street demanding impossible quarterly revenue growth at any cost, it's time for a bunch of pointless consolidation. The first wave was the disastrous AT&T->Time Warner Cable->Discovery megadeals, which resulted in wave upon wave of chaos, layoffs, price hikes, and pissed off creators.

Now Paramount (CBS) is looking to follow suit. First the company discussed potentially merging with Time Warner Discovery, but once that idea was laughed out of the room they moved on to a potential deal with Skydance Media. But that deal also appears to have fallen apart, with a $26 billion acquisition by Sony looking like the most likely outcome.

As the New York Times notes, there's some dwindling concerns about a Japanese company owning an American broadcaster (CBS), given that what's left of our media consolidation regulations still restricts foreign ownership of a major broadcaster (for now!). So it's probably going to be a joint-purchase between Sony and U.S.-based Apollo Global Management:

Any deal between the Sony group and Paramount faces hurdles. Government regulations restrict foreign ownership of broadcast networks and could prevent Sony's parent company, based in Japan, from owning CBS outright. The bidding group would probably push for Apollo, which is based in the United States, to hold the rights to the CBS broadcast license, according to two people familiar with their strategy.

At the heart of this dysfunction sits Wall Street's need for improved quarterly growth at any cost. It's not just good enough to provide a profitable, high quality product, people like. The need for impossible, unlimited quarterly growth inevitably results in a sort of corporate cannibalism, most recently popularized by Cory Doctorow's term enshittification.

What interests me as a media and consolidation critic is that absolutely none of the press coverage (Deadline, Axios, Variety, The New York Times) can muster so much as a single mention of the long, long history of harmful media consolidation, or how such deals almost always result in rampant layoffs, lower quality product, price hikes, endless distraction, cancelled programs, and tons of debt.

Even with the downright comical Time Warner Discovery megadeal right there in the rear view mirror (which, if we're being honest, extends back to the pointless and somehow even more disastrous AOL Time Warner merger), these outlets just genuinely don't think any of that history is useful reader context. The harm of mindless consolidation is just completely memory holed in the industry's coverage of itself.

That said, I imagine Sony would be a better caretaker of the CBS family of brands than many suitors, given that (unlike, say, AT&T), they're at least familiar with running a media company. But it's still painfully obvious that this sort of consolidation never really benefits employees, consumers, or the overall health and quality of the company and brands. It's just a game of pointless brunchlord patty cake.

I wouldn't expect a consolidated media sector to linger too long on the harmful history of growth for growth's sake" consolidation when covering itself, but an occasional, fleeting nod at history and factual reality might be nice.