There is a weird rumour that ViacomCBS and NBCUniversal are considering a merger. Because their losing market share to streaming rivals, they’re looking at ways of getting back on top; like they were when decades ago when the competition was less fierce. If it is in the cards, this merger is foolhardy and doesn’t address the fact that neither company has compelling enough content or a strong enough brand-name to compete with Netflix.

ViacomCBS’s streaming service, Paramount+, used to be called CBS All Access. The name change was simply a redressing because the content library didn’t increase tremendously. Unless you’re a Star Trek fan or you really into NCIS reruns, Paramount+ doesn’t offer too much value to those who are looking for compelling television. Even if you’re into TV series, there’s just not enough there to keep people subscribed for long. For me, the only thing I wanted to watch was the original MacGyver but considering that I couldn’t care less about anything else the service was offering, I’ll wait until I have time (which may be never) to binge the entire series over a month.

Peacock is NBCUniversal’s streaming service. It offers much more content than Paramount+, including sports programming like English Premier League soccer and the WWE Network. It’s a far more compelling service than Paramount+ as the variety of content and the dearth of it means that there’s something for everyone and that you’ll be watching stuff longer than a month. The sticking point for Peacock is that because of international licensing deals, it’s not available outside of the United States (which is unfortunate for me in Canada). It also has a weird pricing structure where there is a free ad-supported tier, a paid tier with some ads, and another paid-tier with no ads.

Between the two, Peacock has the most potential, but because they can’t launch internationally, they have a low ceiling of how many subscribers they can have. Netflix, Disney, and Amazon all have 100 million+ subscribers because they’re offer service to most countries throughout the world. Paramount+ is available outside of the United States, but what it offers is so small in comparison to its competitors that it’s understandable why they’re having trouble growing.

It's important to examine why Netflix, Disney, and Amazon all have so many subscribers. Netflix is the largest streaming service and that’s because they were the first one to be successful. They were able to build their subscriber base on cheap TV and movie streaming deals in addition to their DVD-by-mail service. When the studios realized that money was to be made with online streaming, instead of paying higher rates, Netflix got into making their own movies and shows. To their credit, they didn’t just make content to have a library; they crafted quality programming that was compelling to audiences. Their movies and shows have won awards and have kept people subscribed.

Disney+ is doing well because of the Disney film library. They had an explosive start because there is a huge market for Disney and Pixar films. Star Wars and the Marvel Comic Universe were both the empty-net goal guaranteeing the success of their streaming platform. Disney+ could survive on their family and sci-fi properties because nobody cares too much about the content they offer on their parallel platform, Star. It’s nice to have included in a Disney+ subscription, but nobody is buying a subscription because it gives them access to movies like Gone in 60 Seconds; people subscribe because their kids want to watch Toy Story for the 20^th time.

Then there’s Amazon Prime which is a streaming service tacked onto a shipping service. I subscribe to Amazon Prime because of Prime Video, but I know most people get Prime Video because they wanted Amazon Prime’s other benefits like free two-day shipping. In fact, I’ve had several conversations with people this year who didn’t even know they had access to Prime Video even though they had Amazon Prime. So, while Prime Video does offer a vast selection of movies and shows (including originals), it’s not that much different than Peacock, other than you can get so much more with its subscription than Peacock beyond watching something on a screen.

The problem is that the execs at ViacomCBS and NBCUniversal think their brands mean something. Most people, especially those under the age of forty, don’t care about Paramount, Universal, NBC, or CBS. Those names and letters mean very little. Netflix has brand-name recognition that it is the top of the streaming food-chain. Disney has an extremely successful film empire. Amazon has an e-commerce website that supports Prime Video (and vice-versa). The only thing that ViacomCBS and NBCUniversal has is content.

For streaming services, content is king, but at this point, the race to become a top-level streaming service is over; there are only three that people care about. There’s also HBO Max (owned by WarnerMedia), but they’re struggling to keep up with their competitors. They made a big play to put the TV series Friends on HBO Max, but that means instead of selling the rights to another content provider, they're moving money from one pocket to the other as Friends is owned by WarnerMedia. They're hope is having Friends on their service will draw in more customers than to sell the rights to a competitor. It's possible, but that would means that they would have to gain and keep 1.5 million subscribers for the gamble to pay off (based on the $425 million/5 year deal for the streaming rights). There is value to series like Star Trek and Law & Order, but most people (there are some) are not going to spend $10 a month on one or two series that they like.

Instead of trying to merge and create a new streaming service that people won’t buy, why not just lease out the catalogues to the highest bidder. Netflix and Amazon are spending billions on content; why not have these companies in a content war buy your content? Considering the subscriber numbers for each service, it might be more profitable for Paramount+ and Peacock to fold and have bidding wars for their series to Netflix and Amazon (Disney+ only streams their own content).

It's not like the studios aren’t doing this already. Content rights have been a mess in Canada for far longer than I’ve been writing about movies (which I can’t believe is almost 20 years). If media companies weren’t making money from leasing out their content libraries to Canadian media companies for broadcast (and now streaming), they wouldn’t be doing it. Even within Canada, media companies lease out their content libraries to competitors. For example, Murdoch Mysteries, which was a Rogers Media produced shows for its first five seasons (and is currently on the CBC), is available for streaming on Netflix and CBC Gem but not on City Go

Old media is playing catch-up to new media. At this point, CBS and NBC are so far behind that merging will not make much of a difference. Combine that with both ViacomCBS and NBCUniversal’s inability to provide service worldwide due to content agreements in different countries and they’ve already tripped over their own shoelaces before they even start the race.

Disclosure: I own stock in several media companies. For more information, please refer to my disclosure page.