Brands hope for reach, brace for higher CPMs in tug of war over Warner Bros. Discovery

“Whichever media company, if any, ultimately secures it controls the calculus of the streaming wars and so much more,” said Mike Proulx, vp and research director at Forrester.  

Most buyers expect that should Netflix’s acquisition go ahead after Q3 2026 – creating a “Goliath” in the streaming market, according to Proulx – the company would gain leverage in pricing discussions.

With competition fierce and brands having a range of options available to them, advertisers have proven able to exert significant pressure on streamers to lower CPMs in recent years. “That has massively brought down streaming CPMs, which has been a huge boon for advertisers,” said Harry Browne, vp of TV, audio and display innovation at Tinuiti.

Netflix itself has been burned by that pressure – the streamer had to lower ad prices for brands in the face of fierce competition – while Amazon has used it to its advantage, following a loss leader playbook by using Prime Video inventory to entice larger investment by advertisers on its DSP.

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By autumn next year, those supply and demand equations may reverse. With one player removed from the game, and Netflix’s inventory (and the audiences it draws in) strengthened, so too will be its negotiating hand.

“I expect this would put upward pressure on CPMs and stall out some of the advertiser-friendly trends we’ve seen recently,” added Browne.

A Paramount acquisition would likely have similar – if less pronounced effects on pricing, given a merger between the two companies would create a smaller media concern than Netflix and Warner Bros. combined.

“Netflix is the leader [in streaming], so to the extent that they win this, it sets them up in a more dominant position and gives them a lot more pricing power vs. a more competitive market, if Paramount gets it,” said Chris Rigas, vp of media at performance media agency Markacy.

“It would mean that there were a larger number of ‘major’ players, so on-net, I think that leads to less upward CPM pressure,” said Browne.

That’s not to knock the benefits, as far as brands are concerned, of a WBD-Paramount alliance. Though Pluto TV and Paramount+ chase the pack in streaming, a combined company would pool a huge linear TV business together – including CBS, various Turner networks (including CNN), Discovery networks and Comedy Central, among others – and offer advertisers unified measurement across a huge range of media properties and audiences.

Netflix and HBO Max’s combined ad tech stacks could provide a more convenient gateway to their audiences, cutting down on the time spent by buyers getting brands in front of the public. “At a minimum, Netflix will offer a bundle with HBO Max akin to what Disney does with Hulu — relieving users of some cost burden,” Proulx suggested.

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But if CPMs are to rise, advertisers and buyers will want to know they’re getting value for their money. ​​Netflix’s native ads and brand placements have impressed in recent years, noted Markacy co-founder and co-CEO Tucker Matheson.

Being able to use those formats against WBD’s inventory would add some sheen to its premium stock of films and TV, while continued development would help to justify any rise in prices and keep brands on side.

“New forms of ad placement — innovation — is probably mostly what we want to see,” said Matheson.

Others suggest a finalised deal will bring further demands from advertisers already concerned over CTV transparency. “Scale alone won’t justify premium pricing. Without verifiable performance, the market isn’t paying a markup just because you own a massive content library,” said Skyler McGill, head of video and programmatic, Wpromote, in an email.

“Consolidation forces transparency. Buyers will demand clean supply paths with actual accountability. It’s not about who has the most inventory anymore. It’s about who can build the most interoperable ecosystem. The acquirer has to choose between staying in a walled garden or rebuilding to become something that is performance-ready. Only one of those paths wins long term,” added McGill.

Either a Paramount-WBD merger preserving the market’s price competitiveness, or an empowered Netflix leaning hard on eyeballs and time spent to justify rising costs, hold advantages for brands. Each one’s subject to regulatory and political caveats, however.

“A very strong regulatory challenge is inevitable here … With so many different stakeholder groups pushing back … Netflix faces an uphill battle convincing regulators to approve a deal like this,” said John Conca, analyst at Third Bridge, in an email.

There’s political ones, too. Despite President Donald Trump signalling he holds no preference between Paramount and Netflix as owners, the FTC has been active this year in extracting concessions aligned with the White House’s priorities from companies awaiting merger approval – Omnicom and IPG’s deal being one.