UPDATED with earnings call comments. An HBO Max–Paramount+ bundle will launch in early 2027, Skydance CEO David Ellison confirmed in a letter to shareholders on Monday.
In a conference call with Wall Street analysts, Ellison called the bundle “our first step towards unifying the two services.” He said executives believe consumers “will be delighted” by the bundle, which will span entertainment, news and sports, including marquee titles like Harry Potter, The Pitt, Mayor of Kingstown and Landman.
HBO Max and Paramount+ are “highly complementary offerings,” Ellison added, “and over-index with different consumer segments and different parts of the country. By bringing these services together, we are well positioned to deliver for a broad range of audience cohorts. And given this, we really do expect to grow region engagement, improve retention, and increase revenue and profitability, and line with, or ahead of the leading competitors over the long term.
In managing the lead-up to full integration, Ellison said Skydance would “phase in new plans for pricing, with discipline and consumer feedback, so we can continue to grow the services” during the bundle phase.
The $110 billion merger of Paramount and Warner Bros. Discovery into Skydance closed in early October, meaning the earnings report for the July-to-September quarter provides a fairly blurry snapshot. Still, in one of the few pro forma metrics the company offered, reflecting what the outcome would have been had WBD and Paramount merged on Jan. 1, 2025, Skydance said pro forma revenue in the direct-to-consumer division grew 15% year-over-year in the third quarter.
In the current fourth quarter, the letter said, “we expect continued strong DTC revenue growth.” And by 2030, the company expected to have shifted “a meaningful majority of revenue and profit from TV to our streaming and studios businesses” as a counter to the secular declines in linear viewing and advertising.
Ellison has said multiple times publicly that the ultimate aim is to blend HBO Max and Paramount+ into a single service, though that feat is complicated both in terms of the technology lift and the strategic details.
“Long-term, the plan is basically to bring them together,” Ellison said at a press event held to mark the closing of the merger. “It’ll take a period of time to do that. So, I think in the immediate [term], you will see them operated separately, with things like bundling or things that you’ll be able to see accelerated in the relatively short term. I can’t be specific about that yet today.”
WBD had been fairly aggressive in participating in bundles with HBO Max, particularly as it looked to give its ad-supported tier a push. The company’s third-party package with Disney+ and Hulu was an early example of rivals teaming on a bundle.
Adjusted EBITDA in Paramount Skydance’s DTC unit was $225 million, or a 9% margin. The investor letter noted the impact of “higher costs from planned investment in our programming schedule in the quarter, including the UFC and ongoing investment in originals.”
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