Reading the Paramount Skydance+Oracle Tea Leaves
While Disney's streaming vision flatlines, PSKY's Oracle partnership and Meta hire reveal the product-first strategy that could solve legacy media's walled garden trap.
Last week, rumors emerged that the Ellison family is interested in acquiring Warner Bros. Discovery and merging it with Paramount Skydance (PSKY). The news immediately invited comparisons to Disney's 2019 $71.3 billion acquisition of 21st Century Fox.
The timing is symbolically poetic: In 2026, Disney CEO Robert Iger will be stepping down as much of his original direct-to-consumer (DTC) vision from 2019 is phased out. Hulu will sunset—despite a final acquisition cost of $30 billion—and Disney's DTC strategy in the U.S. relies increasingly on recurring revenues from wholesale bundling deals with Charter and DirecTV.
What went wrong?
PSKY CEO David Ellison blames the calculus of content and product at all legacy media companies. Ellison argued these companies failed to "build a tech product that is truly competitive with what's coming out of Silicon Valley". That outcome requires "a combination of great content working with tech product hand in hand".
Basically, content serves the product, the best products win with consumers and both studios and consumers of Hollywood content need better products.
Because PSKY has yet to reveal their product roadmap, we must identify market signals to understand what they're building. Some of the clearest market signals can be found using frameworks from past essays on The Medium:
"The Doom Loop of The Mogul"
The "Digital Everything Product"
Cloud Streaming
1. “The Doom Loop of The Mogul” Path
Disney’s entire streaming strategy was a bet on its “walled gardens” of valuable content, and less so on a product. This resulted in a market dynamic I called “The Doom Loop of The Mogul”:
Legacy media management is unable to deliver shareholder value in streaming within the constraints of their strategic, financial and/or management structures; and
Therefore they engage in self-dealing—selling their own content to in-house streaming services—to keep costs low, and
Therefore writing and acting talent protest with strikes, and with less content produced for their streaming services…
Legacy media management is unable to deliver shareholder value in streaming within the constraints of their strategic, financial and/or management structures… [repeat cycle]
