If a company acquires any form of HBO, one of its top challenges is expected to be streamlining operations while maintaining HBO’s premium brand. This could be especially difficult under a “more mainstream umbrella like Paramount+,” Alderman noted.

Streaming has already diluted the HBO brand somewhat. Through streaming, HBO is now associated with stuff from DC Comics and Cartoon Network, as well as reality shows, like 90 Day Fiancé and Naked and Afraid. Merging with Paramount+ or even Netflix could expand the HBO umbrella further.

That expanded umbrella could allow a company like Paramount to better compete against Netflix, something WBD executives have shied away from. HBO Max is “not everything for everyone in a household,” JB Perrette, WBD’s streaming president and CEO, said this spring.

“What people want from us in a world where they’ve got Netflix and Amazon [Prime Video] are those things that differentiate us,” Casey Bloys, chairman and CEO of HBO and Max content, told The Wall Street Journal in May.

A “stress test” for more streaming mergers

Aside from the impact on HBO Max subscribers, WBD’s merger talks have broad implications. A deal would open the door for much more consolidation in the streaming space, something that experts have been anticipating for some years and that addresses the boom of streaming services. Per Clark, discussions of a Paramount-WBD merger are “less about two studios joining forces and more about a stress test for future M&A.”

If WBD accepts a Paramount bid and that bid clears regulatory hurdles, it would signal that “premium content under fewer umbrellas is back in play,” Clark said.

A Paramount-WBD merger is likely to speed up consolidation among mid-tier players, like NBCUniversal, Lionsgate, and AMC, Alderman said, pointing to these companies’ interest in scaling their streaming businesses and in building differentiated portfolios to counter Netflix and Disney+’s expansive libraries.

If Paramount and WBD don’t merge, Clark expects to see more “piecemeal” strategies, such as rights-sharing, joint venture bundles, and streaming-as-a-service models.