Skydance to bundle HBO Max and Paramount+, with 203 million subscribers

Skydance will launch an HBO Max and Paramount+ bundle in early 2027, it told shareholders Monday, while planning $30 billion in annual content spending and cost cuts.

The announcement accompanied Skydance’s first quarterly results since it completed its Warner Bros. Discovery purchase on Oct. 6. “Starting in early 2027, consumers will be able to subscribe to both world-class streaming services at an even greater value,” the company said in its shareholder letter.

The company did not disclose a price, but its letter promised further details “in the coming months.” Skydance said the two services together have 203 million subscribers.

CEO David Ellison described the bundle on the earnings call as “our first step towards unifying the two services”. He said they complement each other “and over-index with different consumer segments and different parts of the country.”

During the bundle phase, Skydance would “phase in new plans for pricing, with discipline and consumer feedback, so we can continue to grow the services,” Ellison said. He said executives believe consumers “will be delighted” by a lineup that includes “Harry Potter” and “Landman.”

Ellison said at an October event marking the merger’s close that the longer-term goal was to combine the services, while keeping them separate initially.

HBO Max is already available in a package with Disney+ and Hulu, and Skydance did not say whether it would end that or other bundles involving its streaming services. On the call, Ellison suggested the company would assess whether third-party bundles create shareholder value, Variety reported.

Spending and savings

Skydance has more than $80 billion in debt, and Ellison has promised investors he will eliminate $6 billion in expenses within three years. Executives indicated Monday that they want to surpass that savings target, the Los Angeles Times reported.

The workforce is expected to shrink, though the company has not specified how many jobs would be cut or when, the Times reported. Skydance plans at least $2.2 billion in cuts from roughly $8 billion in annual spending on corporate overhead, real estate and facilities.

“This is not just about cutting cost but also how we work,” co-CEO Ynon Kreiz told analysts.

Ellison addressed content spending with analysts. “In a world of AI slop, we think there will always be a premium for truly handcrafted storytelling,” he said.

For comparison, TheWrap reported that Netflix is expected to spend $20 billion on content in 2026, while Disney is expected to spend $24 billion.

Emarketer senior analyst Ross Benes wrote in a note that Skydance’s disciplined approach could reduce content spending and “entrench austerity in an industry that's already struggling,” the Times reported.

Quarterly results

The third-quarter results covered only Paramount because the Warner Bros. Discovery deal closed after the quarter ended. Paramount Skydance reported $7 billion in revenue, an increase of 5% from a year earlier.

Net earnings reached $73 million, while adjusted EBITDA, a measure of operating profit, was $1 billion. Skydance said Paramount remains on track to reach the high end of its 2026 profitability outlook, at $3.9 billion.

Skydance said pro forma direct-to-consumer revenue grew 15% year over year, calculated as if Paramount and Warner Bros. Discovery had merged on Jan. 1, 2025. By 2030, the company expects to have shifted “a meaningful majority of revenue and profit from TV to our streaming and studios businesses,” its letter said.

Shares closed Monday up 8.6% at $8.70, then fell in after-hours trading.

Skydance also announced Monday that James Gunn and Peter Safran will step down as DC Studios co-chairmen. Former Marvel executive Jeremy Latcham will replace them as head of DC Studios in December.