MediaTalk | Season 4 | Ep. 3 - Global Streaming Preview 2026: Bundles, Ads, and Local Partnerships

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Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with the S&P Global Market Intelligence tech, media and telecom news team. Welcome to "MediaTalk," a podcast hosted by S&P Global Market Intelligence, where the news and research staff explore issues in the ever-evolving media landscape. Today we're continuing our S&P Global Market Intelligence Kagan Research 2026 previews with an eye on streaming, both in the US and in Europe, courtesy of a couple of our analysts. Seth Shafer is principal analyst who leads Kagan streaming video coverage and his consumer insights segment. How are we doing today, Seth?

Seth Shafer: Mike, how are you?

Mike Reynolds: Alright. Michail Chandakas is also with us. He's senior research analyst and media communications at Kagan, covering OTT platforms across the European region. Michail, how are things in the UK?

Michail Chandakas: Pretty cold and rainy, although industry-wise, I'm looking forward to HBO Max launching in March and seeing what impact it will have on the landscape here.

Mike Reynolds: Okay. Alright guys, thanks for joining us. Let's start with the big media deal that dates back to last year when Paramount Skydance, just a couple of months after it had completed its acquisition of Paramount Global, began making a run at Warner Brothers Discovery. Subsequently, Netflix and Comcast also made bids as well. The streaming leader's offer, Netflix at least at this point, is favored by Warner Brothers' Board over Paramount Skydance. Seth, we did a MediaTalk episode back in early December. You predicted Netflix would win out. Your thoughts about that now and the deal's impact overall?

Seth Shafer: Yeah, at the time I think the thinking was that Netflix would make a big, bold offer that in some ways would be a cleaner deal to snap up the Warner Brothers side of things and really cut through everything. I think that is simple in that it's a content play, as far as Netflix quickly adding on franchises that Warner Brothers controls—Harry Potter, DC Universe, Game of Thrones, Lord of the Rings, on and on. So Netflix all these years has been build versus buy, building out their infrastructure, subscriber base, building out content. Now as they're a bit more mature, it seems like it's more of a buy opportunity for them. So then, and now, that really hasn't changed much from the Netflix side. I think a lot of the wrangling and the soap opera details have really been from the Paramount Skydance side—probably a lot more wrangling to go before we get resolution.

Mike Reynolds: Michail, what are your thoughts about this? Again, in the sense that if Netflix were to win WBD, what might that do in Europe? And conversely, if Paramount Skydance were to wind up on top?

Michail Chandakas: Yeah, Netflix generates over half of the total SVOD revenue in the region. Its subscriber share is between 35 to 40%. On the other hand, Warner has around 6%, which is from a mix of HBO and Discovery Plus, with the latter being phased out. I don't have the exact figures right now, but I suspect a big chunk of HBO subscribers also have access to Netflix, meaning that this deal will most likely have a limited impact on market shares. It's more about retention, engagement, and the ability to control prices in the future. Paramount Skydance has a joint venture with Comcast. They have a streaming service called Sky Showtime in select markets where Comcast doesn't have a pay TV presence. Paramount+ itself is available in a number of markets. So getting a hold of the Warner assets is more about making it into the top four, threatening Disney's third place, and grabbing a part of Netflix's market share.

Mike Reynolds: Okay. Whoever winds up winning out, this deal is not going to be completed, I would imagine, from governmental perspectives until 2027. Seth, what kind of regulatory situation might happen here in the States?

Seth Shafer: I think we saw pretty quickly that very issue spring to the forefront. As far as Netflix, obviously with its leading position—Michail mentioned stats in Europe, it's a similar, not quite as big a gap in the US, but Netflix is the clear leader: market share in the US, revenue, subscriber base, all those metrics. So the first concern, regulatory hurdle, is for Netflix and Warner Brothers Discovery to convince regulators that they won't control too much of the market and consumers won't be harmed. There's not really any traditional thing to fall back on. It's different from the broadcasting world where there are ownership caps on stations, right? Things like that. There's no hard quota set or limits. So it's really a bit of a public relations battle. From Netflix's side, obviously you can point out consumption data, and they've already done this—looking at the product, the gauge from Nielsen—to point out that on a consumption basis, YouTube is a huge rival. There are plenty of other services that, just on an hours-viewed basis, consumers spend a ton of time at. And that this combination won't materially alter that. Whether regulators buy that—good luck. I think, for better or for worse, this deal is happening at a really unique time. Historically, the US government hasn't been too active in deals like this. The focus has been more on the tech space as far as what share of the operating system market does Microsoft control, browser wars, all of that stuff. It's where the government historically has been involved, but obviously that's the climate we're in, where favorable tweets can potentially move the needle in a deal, and the opposite as well. Predicting the political side is difficult, but from a regulatory point of view, I think Netflix has a reasonably good argument that this in fact won't consolidate too much share or harm/increase pricing for consumers.

Mike Reynolds: Michail, you mentioned Netflix, 40% share over in your neck of the woods. Will they have a tougher time convincing European nations that this might be a good thing?

Michail Chandakas: There will definitely be some scrutiny, but I expect that Paramount Skydance's argument that taking HBO Max out of the equation would give a monopoly to Netflix will ultimately fall short, and the deal will get approved. Similar to what happened in the past when Amazon bought MGM, also with the Disney-Fox deal, and the Paramount purchasing Channel Five in the UK. Especially when considering that Netflix is not buying any of the linear free-to-air networks, and assuming that HBO Max won't be sold as a separate add-on service only available to Netflix subscribers. So that's my opinion.

Mike Reynolds: Okay. Alright. Are there other M&A to watch in Europe at this point, Michail?

Michail Chandakas: There is an ongoing trend of consolidation. RTL Group acquired Sky Deutschland last year. Media for Europe gained control of Atresmedia in Spain and in Germany. And this is not about expansion for the sake of it; they're trying to compete with global streamers. Actually, the UK might be next in line. Sky, owned by Comcast, is in talks to buy ITV's media and entertainment segment for 1.6 billion British pounds, but they are leaving ITV Studios out of the deal, and it's that one division that has shown decent growth and margins compared to the traditional TV business.

Mike Reynolds: Seth, what about here in the US? If the Netflix thing or Paramount Skydance happens with Warner Brothers Discovery, do other deals ensue?

Seth Shafer: Yeah, for better or for worse, we're at that time of year where everyone likes to make their predictions, so we toss out all these bold predictions about M&A. I think, looking at what's driving the deal so far, we're really at this maturation point with SVOD—subscription video—of these companies realizing they need to scale up, and the savings involved. Instead of offering multiple services, if you can consolidate that and ease some of the pain points of consumers who feel like they have to juggle too many services to watch all the entertainment and sports they want, those are definitely drivers. I think the one I'm seeing talked about more recently involves NBC Universal. As far as Comcast, out of the running to acquire WBD, the feeling was that either they had to go big and beef up NBC Universal and Peacock and their streaming side, or consider maybe now is the time to exit and focus more on the core Comcast business. Who would be a buyer of NBC Universal? In recent weeks, there's a lot of names tossed out. Most frequently, Apple is popping up. A lot of the theories are around Apple or Alphabet or Amazon, who would have a clear path to approval—a cleaner transaction to acquire NBCU—versus another media firm, where you would have overlapping networks, broadcast networks, all this complexity that you would

have to divest and do all of that. So that's what I'm seeing pop up. I think there's also speculation around the studio side. If you look at the size of Netflix's bid for just Warner Brothers alone, there is some thinking that studio assets can come into play here. The studio A24 is mentioned a good bit. Lionsgate has split off its studio business from its TV network business—that's potentially in play. I think perpetually people talk about AMC, A&E, some of these smaller network owners, and the interest is not so much in the networks, but some of the IP, the catalog content that they have control over.

Mike Reynolds: Those have been subjects for a while. Let's see if anything actually comes to pass. Let's focus in on HBO Max a little bit, guys. Michail, you're expecting a big year in 2026 for the service. Maybe it's going to take a run at Disney's position?

Michail Chandakas: Yeah, so HBO Max is making a big move in Western Europe. It launched in Germany, in Italy, and in a few smaller markets. The UK and Ireland are next in March. They already have partnerships in place with Sky in the UK, Ypu TV in Germany, and Amazon in multiple territories. Last week, I believe they announced a new discounted bundle with RTL Plus, which is Germany's leading local SVOD service. So I'm interested to see if more deals like this will emerge in 2026 and how HBO Max will compete in these mature streaming markets.

Mike Reynolds: Okay. Seth, what do you think about HBO Max, separate from potential acquisitions?

Seth Shafer: Yeah, that service has been interesting. They were a bit more measured in expanding outside the US, largely because they had output deals in place in a lot of markets, where they were basically more interested in continuing to license their content versus battling it out with a standalone service. That thinking shifted over the last year or two, so they're actively now rolling out in international markets. The growth is good. The subscriber numbers, like we've talked about, are growing pretty rapidly as they now launch in all these markets that they delayed launches in. I think the challenge, though, is the revenue side—the ARPU side of that—where a lot of times these deals are fairly low ARPU deals in markets with lower ARPU, and even in the US they've maintained growth. We look at the services in the US that have shown the strongest growth pretty consistently over the last year or two. Now, Paramount+ and HBO Max have been the standouts in a crowded, competitive US market. So they've also expanded their presence in the US, but especially over the last six to twelve months, a lot of that growth has come from the bundle with Disney and then distribution deals with pay TV operators like Charter, where the services are included for free with the pay TV package more and more. Those are good for subscriber counts. It poses a challenge, though, from an ARPU perspective because those are basically wholesale deals where they're making a good chunk less than someone directly

going and signing up. So they're sacrificing on one side for the scale of subscriber growth and not quite making as much from a profitability point of view.

Mike Reynolds: Seth, you alluded to Comcast and NBC's aggregate streaming service. Peacock has been stuck at about 41 million paid subscribers in the US now for, I think, the last three quarters. Winter Olympics is next month, February. Is this a growth opportunity here for Peacock?

Seth Shafer: Yeah, I mean, we've seen Peacock has gotten some bumps from big sporting events in the past, where the subscriber count bumps up and they've done a good job of retaining, so we don't see a huge amount of churn. People don't sign up for the Summer Olympics and immediately drop the next quarter. They've been able to hold onto that. As we go through this cycle with sports, can sports continue to drive subs for Peacock and they continue to maintain them? I think so. I would expect a bump there of some sort. I think really the difficulty you allude to—growing that subscriber base—is starting to pinch a lot of these services. I've mentioned, I called out Paramount+ and HBO Max, and they have shown good, strong year-over-year growth. But the last several quarters, we are seeing these growth rates bend for all the services. They're still growing, but at lower and lower rates. So I think the challenge moving forward in the US, at least for a service like Peacock that's US-only, is there's just only so many households, and when the average household's tacking on 4, 5, 6 services, it becomes harder and harder to keep moving that needle on the subscriber growth side.

Mike Reynolds: Gotcha. Michail, what about the US-based programmers with their services over in Europe? They're doing pretty well, right?

Michail Chandakas: Yeah. The market, like I said previously, is saturated, and US-based streamers hold the majority share, whether that's revenue share or subscriber share. European players, usually free-to-air broadcasters and studios, outside consolidation and M&A, are also looking to partner directly with streamers.

Michail Chandakas: We saw some deals last year for the first time between Netflix and France's TF1, and Amazon with France Télévisions. These deals include the exchange of content and the host of live channels on global streamer services. It's a way for local broadcasters to tap into the younger, streaming-savvy audiences, while the US streamers themselves get to boost their local content quotas and tap into new libraries essentially for free.

Mike Reynolds: You think the local guys are definitely going to become more aggressive?

Michail Chandakas: They are becoming more aggressive. They have been trying multiple strategies—launching hybrid SVOD services directly, looking at consolidations. And this

sort of third strategic approach is recent. Looking ahead to 2026, I wouldn't be surprised to see Netflix rolling out similar partnerships in other major Western European markets, especially in those where the free-to-air broadcasting is still going strong. If you look at the deal with TF1 in France, that includes live streaming TV channels hosted on Netflix, so that shows that they already have the technology and the ambition to go further. The question is, which country will be next?

Mike Reynolds: We'll keep our eye out for that. We've alluded to sports a little bit along the way here. Seth, a lot of the major leagues are now streaming games and there's going to be more to come, I would take it?

Seth Shafer: Yeah, for sure. We've talked about this a bunch and covered it a bunch at Kagan. Definitely that's the future, as far as tracking where consumers are spending the majority of their time. That said, sports is still so important. The pay TV world in the US is not going to zero, is not going away, so we have this odd time where all we're talking about is streaming and sports, yet the majority of most pro leagues in the US—the broadcasts are still on linear television, still on that kind of pay TV, free-to-air world. We're foreseeing more streaming sports coming to services. But what we've seen so far are leagues—the NBA was the most recent example—not just splitting access to live sports across traditional linear TV and streaming, but splitting the streaming packages across different services, and that seems to be the model. Sports fans don't necessarily like it; you and I have bemoaned that fact of, "Man, I have to get this service for two games." Exactly. "I have to have that, I have to have this." But the economics driving it are still pretty good for both parties, as far as the rights holders and the broadcasters that are bidding on it. So I think that's going to be our world for a while, at least in the US.

Mike Reynolds: Michail, Kagan—you guys just did some research, scorecarding global streaming outlets and sports. No surprise, the results found soccer and basketball on top, but your thoughts on the rest that may not map out with what we might think about here in the US?

Michail Chandakas: Yeah. If you look at European history and culture, sports have always played a big role. Take tennis, for example, where Europeans have consistently been champions in some of the biggest tournaments. There's also motorsports, with iconic brands and legendary teams coming out of countries such as the UK, Italy, Germany. We have the Olympics, which were revived in Greece in the late 19th century. All these sports gave nations the chance to compete, win medals, boost their national pride. So it's a blend of historic events. You have famous clubs and that sense of national achievement, and all these sports—such as tennis, motorsports, or even rugby and cricket, especially in the UK and in the Commonwealth countries—they're available via streaming throughout the

region, with players such as DAZN, Amazon, Viaplay, Warner, Sky owning most of these rights. So both pure streamers as well as pay TV operators and broadcasters.

Mike Reynolds: Okay. Alright guys, we're getting to the end. Let's talk about some ad sales for SVOD services as well as the FAST services—the free ad-supported services. You first, Michail. What's the market like these days on those fronts?

Michail Chandakas: Yeah, in Europe it's pretty clear that it's ad-supported plans that are driving subscriber growth in the market. They make up about a third of all subscriptions currently. And it looks like European viewers are quite comfortable with watching a few minutes of ads in exchange for a lower price. That flexibility allows households to keep multiple subscriptions active. Most platforms, both local and international like HBO Max, have adopted that model across Europe. Revenue-wise, the share is still very low—it's between low to mid-single digits.

Mike Reynolds: Okay.

Michail Chandakas: But we are seeing signs the ad revenue will grow at a much faster pace compared to what's coming from traditional subscription fees. So it's definitely a space to watch over the next few years.

Mike Reynolds: Seth, what about here in the States?

Seth Shafer: I think similar trends here, although we were a bit ahead of the curve with resigning ourselves to having ads on streaming services.

Mike Reynolds: Part of the American way, my friend.

Seth Shafer: Yeah, no, I think the wrinkle within the last couple of years that we've also talked a lot about is Netflix, Amazon, Disney leaning more heavily into ads. What does this mean for the industry? To your point about upfronts and that role, the streamers are playing a bigger and bigger piece of the upfront, from a visibility point of view, and then just from a sheer billions of dollars of ads transacted. This wave of inventory coming into the market has had an impact on CPMs. Most of the major media companies have acknowledged that some of their streaming services have been pressured as far as CPM costs or the CPMs they can achieve, dropping a bit with this inventory flooding in. Moving forward, I think our estimate is around 40% of Netflix subscribers are now on the ad-tier plan. So this isn't going away, obviously, it's here to stay. As far as—we just talked about sports—but that plays part of it too. I think the big questions in the US are: as all of these streaming services scale up on the advertising side, having sports programming be part of the offerings that you can offer up to advertisers as far as formats and audiences they can reach, is that increasingly going to be at the cost of pay TV? Is this revenue going to slide over? Is it

additive? Is it new money being spent? And is there a point at which there's easy growth at the beginning for all of these streamers, but then three, four, five years out, is it more difficult to move the needle there on the ad side as they bump up against Meta and Alphabet and Amazon and TikTok and services outside of the SVOD realm? What does that look like? So that's what I'm keeping my eye on at the moment.

Mike Reynolds: That's a point well made. This is a transitional period for the Madison Avenue world for sure. We're going to finish up, Seth, with the preview. What's going on with the Consumer Insights Groups and its various surveys? What are we looking after for 2026?

Seth Shafer: Yeah, the elevator pitch: these surveys we run in 10 markets around the world—representative markets in the US, Europe, APAC. A lot of the stuff we survey for dovetails with what we talked about: streaming video usage, ad-tier plans, things like that. We really are assessing what consumers do around digital entertainment there. So we're looking at video, we're looking at gaming, we're looking at streaming music. But then we're also able to branch out. We're looking at sports more and more as operators are putting together bundles—pair up a shopping service with a streaming service, with music, with this, with that—we're trying to be responsive there. So when we ask about these consumer behaviors, we're trying to gauge for what they're doing across all of these different aspects of their daily life as a consumer to help clients crunch all those numbers and see where they're at, benchmark where they're at, and where they might want to be as far as partnerships, bundles, things like that.

Mike Reynolds: That gets us to the end of this episode of "MediaTalk." I wanted to thank Seth and Michail. We appreciate you taking us through the intriguing world of streaming. We appreciate it, fellas.

Seth Shafer: Thanks for having us.

Michail Chandakas: Thank you.

Mike Reynolds: This is Mike Reynolds. Thanks to all of you for listening. We'll catch up soon on the next edition of "MediaTalk."