How Can AI Enhance Value in Media Mega-Mergers?
This week has seen significant developments in the media mergers and acquisitions landscape. Paramount made headlines with its ambitious $110 billion bid for Warner Bros. Discovery (WBD), while the alliance between Banijay and All3Media formed unexpectedly swiftly.
Although the scale of these two transactions differs greatly—Paramount’s bid vastly eclipses the newly combined Banijay production entity—they reveal a shared belief in the notion that larger companies can drive greater success. Executives from both firms emphasized the advantages of size, discussing how it empowers creativity and enhances service to audiences. Notably, a common thread in their aspirations is the incorporation of artificial intelligence.
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During an investor call on Monday, Paramount’s Skydance chief, David Ellison, was questioned about the role of AI in the impending WBD deal. Ellison, previously known for his acting role in Flyboys, described AI as a “transformative” technology. He referenced earlier comments in February, when he noted the “power of IP enabled by AI” would serve as a “tailwind” for his expanding company.
While Ellison provided few specifics, he suggested that AI could be utilized to analyze Paramount and Warner titles. This could lead to the generation of new studio ideas, enhancements in streaming recommendation algorithms, and advancements in advertising technology.
Ellison sought to bolster his message by highlighting the potential of Seedance 2.0, an AI tool that sparked concern in Hollywood. He argued that the tool demonstrates audience engagement, allowing them to interact with beloved characters like SpongeBob and Eric Cartman. He raised the question of whether the combined entity could follow Disney’s lead by establishing an AI licensing deal that grants audiences a role in storytelling, or if Ellison might leverage his father’s Oracle technology to achieve similar results.
In contrast, Banijay’s CEO François Riahi offered a more detailed perspective, sharing that the company is developing an AI model that will enable employees to create videos through basic text prompts from a vast 260,000-hour content catalog, following the completion of the All3Media acquisition.
Riahi illustrated this potential by envisioning a “two-minute format featuring the best recipes from MasterChef globally,” which could be distributed on platforms like YouTube. He noted that only 5-10% of Banijay’s library is fully utilized at any time, implying that AI could play a critical role in maximizing the remaining 90% of content.
Both Paramount and Banijay are betting on AI to enhance their vast libraries. The implications extend beyond content creation; AI may also generate savings in business services, product development, and post-production. The success of these mergers may hinge on whether AI proves to be the pivotal element that ensures their prosperity, unlike past media mergers which faltered.
The overarching message from Ellison and Riahi is affirmative, albeit with skepticism. While articulating an optimistic AI vision to investors, they must also assuage fears among creatives—many of whom face layoffs—that AI will serve as an ally rather than a rival. Resistance is expected, especially since Ellison has repeatedly emphasized that AI “is never a replacement for filmmakers.” The concern remains about whether they might be too late, as entities like Seedance may already be capitalizing on valuable intellectual property.
Ultimately, the developments at Paramount and Banijay will serve as crucial case studies in determining whether AI can indeed unlock value in large-scale media mergers.
