Talks On To Bundle Paramount+, Apple TV+ – Report – Deadline

Paramount Global shares closed up nearly 10% Friday, leading entertainment stocks higher after the Wall Street Journal reported that Paramount Global and Apple are discussing bundling their respective streaming platforms at a discount.

Consensus is emerging that there may too many standalone services for the market to bear. Bundling can reduce the costs to consumers, lowers churn for provider and otherwise make sense, industry executives and Wall Street agree, anticipating more of it. It’s a move short of the outright M&A that many also predict as media companies grapple with streaming red ink and a decline in linear television.

The WSJ report said talks to bundle Paramount+ and Apple TV+ are in early stages.

Verizon is bundling Max and Netflix and CEOs from Warner Bros. Discovery’s David Zaslav to Paramount’s Bob Bakish have increasingly voiced support for third-party bundles. It’s already been working internally with Disney having offered a Disney+, ESPN+ and Hulu bundle for some time.

Paramount has formed a number of partnerships to drive streaming growth including with Walmart+ and Delta in the U.S. and, internationally, deals with Sky in the U.K., Italy and Germany, Canal+ in France, JCOM in Japan, CJ Media in Korea, and most recently in Greece with local cable provider Cosmote. On Paramount’s last earnings call, Bakish called partnerships “a meaningful contributor to our momentum,” and said “this new phase of expansion is just getting under way.”

The company declined to comment on the report. Apple reps weren’t immediately available.

Paramount shares jumped 9.8%, closing at $15.78. Apple was flat. The streaming service, part of the tech giant’s fast-growing services sector, is still only a small part of its business. Its Apple TV portal, which enables it to charge hefty fees from every streaming subscription generated there, is much larger and more lucrative arena than Apple TV+.

“Apple has tons of leverage,” said media analyst Barton Crockett of Rosenblatt Securities in a CNBC interview. “Apple’s a different bird, so we’ll see what they [Paramount] are able to negotiate with Apple. In the kind of bigger picture, it’s very clear to me that over time streaming needs to migrate towards these big tech platforms. And I thought breakups, and sales of libraries, and sales of sports assets is the way that’s going to happen. Certainly, these partnerships, these kind of synthetic bundlings, may be a kind of partial step,” he said.

“But it’s also not clear to me that if Apple is going in that direction, that Paramount will be the only participant.”