3 Ways Your Wallet Will Feel It

Paramount Skydance recently beat out Netflix in a $111 billion bidding war to buy Warner Bros. Discovery.

Yes, the company that owns CBS, Nickelodeon, MTV, Comedy Central, Showtime and Pluto TV is swallowing the company that owns HBO Max, CNN, TNT, TBS, Batman and Harry Potter.

A major business merger like this can sound like background noise. But when media giants merge, shockwaves often hit the consumer.

I’ve watched telecom and media megadeals happen for decades, and the promises of a “better consumer experience” almost never pan out. Instead, you usually end up with fewer options and a lighter wallet.

Here is the marriage of Paramount and Warner Bros. How Discovery will impact your entertainment budget.

1. Expect your streaming bills to rise

Let’s look at the statistics. Paramount is taking an astronomical amount of credit to pull this off. It’s paying $31 a share, taking on tens of billions of Warner’s existing debt, and borrowing heavily just to buy it. According to The Guardian, Paramount has lined up $54 billion in new debt just to complete the takeover.

All that debt must be paid. How does it do that? Another way might be to squeeze more revenue from subscribers.

Right now, both Paramount+ and HBO Max are competing for your dollars. When they are under the same roof, that competition disappears. You’re likely to see aggressive price increases on whatever streaming platform they end up introducing.

We’ve already seen streaming prices skyrocket over the past few years, and a merger of this size accelerates that trend.

2. Say goodbye to cheap private services

Currently, you can buy Paramount+ or HBO Max separately, or you can get one thrown in for free through your mobile provider or with a Walmart+ membership. Enjoy those benefits while they last.

When media companies merge, they tend to stack up. It makes their subscriber numbers look good to Wall Street. You’ll likely see Paramount+ and HBO Max combined into one, big streaming app.

While having all your favorite shows in one place sounds great, it means you’ll be forced to pay a higher price for a bunch of content, even if you only care about watching “The Series” or NFL football.

They want to integrate you into their ecosystem so you can cancel and rotate streaming bundles as easily as possible right now.

3. Less original content, more repetition

These are the hidden costs of business integration. When two big studios come together, they look for synergies. In plain English, that means job cuts and production budget cuts.

Prior to this deal, Paramount and Warner Bros. they are competing with each other – and against Netflix – to win your attention by shining a light on new, high-quality movies and series. With only one very small competitor in the market, the newly formed giant does not have to try hard.

You’ll probably see a few serious, original shows being produced. Instead, the new company will rely more on milking existing franchises, endless spin-offs, and reality TV because it’s cheaper to make and carries less financial risk. You’ll pay more per month, but you’ll get a few new, real stories for your money.

So, what should you do now? Always keep a close eye on your credit card statements. Check your streaming subscription this weekend. If you pay for services you don’t use each week, cancel them before the post-bundle price increases start.