While entertainment giant Paramount’s (NASDAQ:PARA) plans to merge with Skydance Media proved a little less than popular, the idea that Paramount might instead get picked up by Sony (NYSE:SONY) is proving a whole different matter. The stock exploded upward when the news first emerged, and it was up again fractionally today, though it lost some of those gains as the day went on. New reports suggested that a Paramount/Sony merger could fundamentally shake up the media field to the point where even Netflix (NASDAQ:NFLX) might be concerned.
So, what’s got the streaming market so deeply concerned? Well, the combination of Sony and Paramount is already being described as a “media colossus” in the making. We know that Sony’s attempt at streaming, Crackle, was never what anyone would call a big deal. It had its share of noteworthy content—I personally was deeply fond of “Gorgeous Tiny Chicken Machine Show” before the Crackle sale made it pure unobtainium—but the notion of the Sony library supplying Paramount+, which already has no shortage of content of its own, could turn Paramount+ into a serious winner.
Sony Is Jam-Packed Full of Old Content
Netflix may quake in its collective boots thanks to an old problem that some might have thought long dead: the “catalog title.” A catalog title, to quote Law Insider, is “..any title published as a Licensed Content Product on an LCP Unit or Interim LCP Unit other than New Release Titles.” Basically, it’s “old stuff.” And Sony is jam-packed full of old content. The Screen Gems network is, after all, a Sony property, and Screen Gems has more old content than a hoarder’s attic.
Start with “Bewitched,” follow it up with “I Dream of Jeannie,” and add another 32 titles, and you’ve got the list. And if Sony puts that all on one central network, that network could suddenly be a huge draw. It also could leave many content networks without a lot of content and fundamentally shift the value proposition.
Is Paramount Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on six Buys, eight Holds, and seven Sells assigned in the past three months. After a 43.89% loss in its share price over the past year, the average PARA price target of $13.29 per share implies 7.09% upside potential.
Is It Wise to Allocate $1,000 Toward PARA Stock Right Now?
Before you hurry to invest in PARA, think about the following:
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