Paramount Global executives have assured that it will be business as usual until the merger is finalized, but analysts are already contemplating the future of the company's extensive operations across various countries.

Paramount boasts major free-TV operations in Argentina, Australia, Chile, and the UK, along with cable networks worldwide, the fast-growing Pluto TV streaming service, and regional adaptations of Paramount+. Additionally, they have partnered with Comcast to operate the joint-venture streamer, SkyShowtime, as well as running a successful program sales business that distributes popular franchises like NCIS and CSI globally.

Naturally, such takeovers bring concerns for employees about potential job losses. The post-announcement conference call revealed a plan for $2 billion or more in "cost efficiencies," but it is worth noting that Skydance lacks the international presence and workforce size of Paramount. Consequently, there may be limitations in eliminating duplicate roles across global offices, unlike the notable staff reductions seen in previous mergers involving companies like Warner Bros. and Discovery.

Richard Broughton, Executive Director at Ampere Analysis, sees this merger as an opportunity for international growth. Broughton stated, "Skydance's history has shown investment and rapid expansion. Its private equity backers, KKR and RedBird, have previously expressed interest in sports, and investors Tencent and CJ ENM have ambitions in interactive entertainment."

With the economic recovery underway in major markets and production activity rebounding, especially on an international level, there is a potential for renewed investment in Paramount's core businesses as well as diversification of their media portfolio.

Paramount's free-TV stable includes CBS, Network Ten in Australia, Telefe in Argentina, Chilevision in Chile, and Channel 5 in the UK. Channel 5, originally a small commercial network in the UK, has now become a prominent player alongside competitors like Channel 4. Paramount has already integrated some of the broadcaster's streaming properties into Pluto TV to simplify the consumer proposition and ensure a wide range of brands are available in one place.

The FAST (Free Ad-supported Streaming TV) service is gaining substantial traction. Olivier Jollet, EVP and GM of Pluto TV, proudly announced at a Cannes Film Festival keynote that the company achieved a billion-dollar advertising revenue business in 2021, just seven years after its inception.

Embracing technology has been a key focus for Skydance, while Paramount brings both paid streaming services and free offerings. Tony Gunnarsson, Principal Analyst at Omdia, explains that in the streaming industry, major players compete by offering a broad range of products and services. He believes Paramount has a strong position with their subscription-based video-on-demand (SVOD) brands and Pluto TV for advertising-based video-on-demand (AVOD)/FAST.

In the cable sector, Paramount owns several well-known networks like MTV and Nickelodeon, which remain a staple on pay-TV services globally. Bob Bakish, former Paramount boss, who rose through the ranks at Viacom with a focus on securing international distribution for these pay channels, oversaw the reduction of international originals on Paramount+. Unfortunately, this decision garnered criticism from subscribers and damaged the streamer's reputation among international producers.

Paramount+ has achieved success domestically, with Omdia estimating over 40 million paid subscriptions in the US by the end of 2024. However, its international presence is much less prominent, lagging behind major services like Netflix, Amazon, Disney, and WB/HBO/Max in most markets. Paramount+ is often bundled with other pay and streaming services in various territories, such as Sky in the UK, Canal+ packages in France, and TVing SVOD service in South Korea.

The challenge lies in striking a balance between revenue from program sales and the growth of D2C (direct-to-consumer) services like Paramount+. Jack Davison, EVP at content consultancy firm 3Vision, affirms that many studios realize the need to diversify their revenue streams and adopt a hybrid approach. Paramount now recognizes the importance of leveraging their library and content pipeline to generate additional revenues.

Francois Godard, Senior Media and Telecoms Analyst at Enders Analysis, believes that internationally, Paramount+ lacks the necessary scale to grow profitably even after the merger with Skydance. He suggests that the new owners should contemplate returning to a wholesale model where they sell content to third-party platforms rather than directly targeting consumers.

The current trend indicates a shift towards program sales and the introduction of branded Paramount+ blocks as opposed to full-fledged services worldwide. Lisa Kramer, President of International TV Licensing, has hinted at the possibility of exploring alternative strategies in markets beyond their flagship Paramount+ services.

Industry experts point out that partnerships will be crucial for Paramount+'s future success, emphasizing the need for stronger alliances and deeper collaborations with local partners. Paramount finds itself in a position where it cannot go it alone in the streaming ecosystem and must rely on support from regional players.

As the deal between Skydance and Paramount progresses, industry observers will closely watch how this merger impacts the global landscape and what strategies will be implemented to capitalize on the strengths of both companies while ensuring sustainable growth and profitability.