Amazon is laying off hundreds of employees as a result of consolidation and reorganizing across its studios. Meanwhile, the company’s streamer will introduce ads to its base level, with the option for subscribers to pay for an ad-free tier. Will people buy in? Also, is Skydance CEO David Ellison looking to purchase Paramount? Kim Masters and Matt Belloni examine.
Belt tightening at Amazon? The mammoth company has reduced workforces across several divisions including 500 employees of its gaming streamer, Twitch. “They are looking very closely at Amazon Studios and what they are doing, MGM has this secondary streamer MGM+, which puts out original content. They are squeezing those executives together and kind of consolidating that,” Belloni says.
What about those pesky Prime Video ads? The streamer is set to integrate ads on its default tier January 29, but will viewers pay more to opt out? “The vast majority of people are going to keep their Amazon Prime with ads, they're not going to pay the $3 Extra. And that's a huge deal because Amazon is such a behemoth that they are going to reap a lion's share of the streaming video revenue,” Belloni speculates. “If I was another traditional streamer looking to sell ads, I would be scared of Amazon.”
A potential cash offer for Paramount? The Wall Street Journal reported that Skydance founder and CEO David Ellison could be looking to make a purchase of Paramount Pictures. “The gist is that David Ellison, with the backing of his father, would be looking to take control by taking control of this National Amusements entity that basically controls Paramount,” Masters explains.
What’s the catch? The scenario would require a two-part deal seeing Ellison putting a cash offer in for National Amusements, then a second transaction involving a merger between Paramount Pictures and Skydance. “There are shareholders of Paramount–that are not the controlling shareholders–that may not love this deal that would benefit National Amusements and the Redstones and may not benefit the non-Redstone shareholders as much as they would like, and those shareholders would have to sign off on that deal,” Belloni clarifies.