Paramount's $79 Billion Gamble: Inside David Ellison's Race to Rival Netflix

Since assuming the role of CEO at Paramount Skydance in August, David Ellison has wasted no time implementing sweeping changes designed to transform the struggling legacy media company into a competitive streaming powerhouse capable of challenging Netflix and other industry leaders.

Ellison, whose ascent to the position was facilitated by his father, tech billionaire Larry Ellison, is pursuing an ambitious restructuring plan that involves technological upgrades, executive talent acquisition, and a controversial reimagining of the company's news operations—all while preparing for a planned mega-merger with Warner Bros. Discovery.

Closing the Technology Gap

A central pillar of Ellison's strategy involves upgrading Paramount+ streaming technology, which multiple company insiders have described as inferior to Netflix's platform in both functionality and user experience. The company aims to prioritize investments in advanced technology to narrow this competitive disadvantage.

The combined subscriber base of Paramount's paid streaming services and WBD's platforms would reach just under 200 million, compared to Netflix's 325 million subscribers. Media analyst Joe Bonner of Argus Research noted that emulating successful competitors is a logical approach for companies seeking growth in saturated markets.

According to internal communications obtained by Business Insider, Paramount+ is developing TikTok-style vertical short-form video clips featuring content from properties like "Top Gun: Maverick" and "SpongeBob SquarePants." Product design head Dan Reich indicated his team is working to integrate one million clips into the platform as rapidly as possible.

The initiative mirrors similar efforts by Netflix and Disney, which recently partnered with OpenAI to incorporate AI-generated short clips. Media analyst Rich Greenfield of Lightshed Partners emphasized that building daily user habits is critical, noting that consumers don't instinctively check Paramount+ the way they do YouTube or Netflix.

Enhanced Streaming Features

Beyond short-form content, Paramount is expanding its sports multiview feature, initially launched for UEFA soccer matches last fall. Plans include enabling viewers to watch multiple angles of live events such as UFC matches simultaneously—a capability Netflix currently lacks despite its live event offerings.

Additional features under consideration include interactive shopping and user-generated content, following models successfully deployed by YouTube and TikTok. While Netflix experimented with interactive storytelling starting in 2017, the company has since scaled back those efforts.

Organizational Restructuring

Paramount is merging the technical infrastructure of Paramount+ and Pluto TV, its free streaming service, in an internal process dubbed "convergence." This consolidation aims to improve operational efficiency and prepare for integrating HBO Max into a unified offering once the WBD acquisition closes.

Recent internal memos indicate the reorganization will emphasize "AI enablement and automated testing," while Ellison has elevated the company's data and analytics capabilities under EVP Jason Kim. Domenic DiMeglio, Paramount's head of streaming data, insights, and marketing, described the transformation as positioning Paramount as "the most tech-forward media company" in the industry.

Leadership Overhaul

Ellison has executed significant personnel changes, bringing in former Netflix executive Cindy Holland to oversee streaming operations and appointing journalist Bari Weiss to lead CBS News in October—a controversial decision that has generated internal criticism.

The company also recruited Danielle Carney from Amazon's video and live sports sales team to direct U.S. advertising sales, alongside Chris Brady from Tribeca Enterprises as an advertising business EVP. However, longtime executives including Chris Simon, an EVP with over three decades at Paramount, and streaming product and tech leader Vibol Hou have departed. CBS News has experienced notable exits including star correspondent Anderson Cooper.

Financial and Political Challenges

Paramount faces substantial headwinds as it pursues its transformation. The WBD acquisition will saddle the company with $79 billion in debt, creating immediate pressure to deliver shareholder returns.

Ellison's relationship with President Donald Trump and his appointment of Weiss, who delayed a "60 Minutes" segment critical of the Trump administration, have raised concerns about political influence over news operations. Ellison has stated his goal is positioning CBS News to serve the "70%" of Americans who identify as center-left or center-right, though analysts question the viability of this positioning.

Additional scrutiny surrounds potential backing from Middle Eastern sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi, though Paramount has neither confirmed nor denied their involvement. RedBird Capital's Gerry Cardinale acknowledged expectations to "syndicate with strategic domestic and foreign investors" while avoiding specifics.

Coinasity's Take

While Ellison's technology-focused transformation strategy demonstrates recognition of Paramount's competitive disadvantages, execution risks remain substantial. The $79 billion debt burden from the WBD merger will severely constrain operational flexibility precisely when the company needs resources for technological investment and content production. Political controversies surrounding news operations could alienate audiences and advertisers, while potential Middle Eastern investment raises governance concerns that may impact long-term strategic independence. Success will ultimately depend on whether Paramount can close the technology gap with Netflix before mounting debt obligations and subscriber acquisition costs overwhelm the restructured entity.