Why Paramount Global Stock Was a Winner on Wednesday

What happened

The entertainment world is all about streaming video these days, and some promising news about that technology pushed Paramount Global's (NASDAQ:PARA) stock higher on Hump Day. The incumbent Hollywood film and TV studio's shares enjoyed a nearly 4% lift on a day when the S&P 500 index fell by 0.4%.

So what

In an article covering Amazon's (NASDAQ:AMZN) plan to offer an ad-supported version of its Prime Video streaming service, The Wall Street Journal said that Paramount could deepen its relationship with the monster retailer.

Citing "people familiar with the situation," Paramount is currently in discussions with Amazon to add the ad-supported tier of its own streamer (Paramount+) to Prime Video. At the moment, subscriptions for the Premium (i.e., streaming without ads) tier are offered through Prime Video; if these negotiations are successful, the "Essential," ad-supported version would be available too.

Subscriptions to a number of outside streaming services are available via Prime Video; among these is Warner Bros. Discovery's Max. According to the Journal, Warner Bros Discovery is also in talks with Amazon to include its Max ad-free tiers to Prime Video.

Now what

Given that Paramount (not to mention Warner Bros. Discovery) already has what appears to be a healthy partnership with Amazon covering Paramount+ Premium, it's probable that this will extend to the ad-free tier.

If it does, it won't really be much of a game-changer, but even marginally higher take-up through Prime Video can only benefit the company. Distribution has always been critical to the success of Hollywood, and it's no different now with digital outlets like streaming.

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