The $110 billion deal has been finalized, and Hollywood giants are betting that artificial intelligence will reshape the entertainment industry.

Hollywood's "Big Five" has officially merged into the "Big Four".

Earlier, the century-old Warner Bros. Pictures was once on the verge of being acquired by streaming giant Netflix (related reading: Fighting Paramount, Netflix's Determination), but eventually lost to Skydance, the parent company of Paramount Pictures, which is led by billionaire David Ellison.

The $110 billion merger of Hollywood's two giants, Paramount and Warner, was completed on Tuesday. Together with Disney, Sony and Universal Pictures, Skydance has become one of the only remaining four major studio giants in Hollywood.

43-year-old Ellison will lead the merged Skydance, describing the merger and rebranding as "the beginning of a new era in the entertainment industry".

Judging from the information released so far, this new Hollywood giant will bet that technology and artificial intelligence will reshape the entertainment industry.

01

Embracing technology is a fundamental capability of Skydance

Plans to deploy AI tools across the entire business

Ellison said in a memo to employees: "Technology is reshaping the way stories are created, distributed and experienced."

He said Skydance will "embrace technology — not just treat it as a buzzword or a side business, but regard it as a fundamental capability of this company."

Incoming co-CEO Inon Kraus said at a press conference that the company plans to use technology to "improve the way we work; enhance creativity; and come up with better ways to engage consumers."

Earlier, Ellison and Kraus mentioned technology nine times in a press release about the new company's leadership team, which includes veterans from Google, Facebook and Scale AI.

Executives said they plan to deploy artificial intelligence tools across the entire business, and Ellison described AI as a "force multiplier".

Skydance is ramping up its technology investment because it not only faces competition from entertainment companies such as Netflix and Disney, but also from technology companies such as Apple, Amazon and Meta Platforms. Ellison said the industry has failed to adapt to these challengers quickly enough.

"They let Netflix disrupt their business," he told reporters. "They let Amazon Prime Video enter the market and disrupt their business. Instead of transforming, they stuck to the old ways for too long."

Kraus said: "The industry is at a turning point. We have the assets, brands, capabilities, global influence, and most importantly, the talent that can drive growth and innovation and rethink business models. Our mission is to build the next-generation global media and entertainment company driven by creativity and technology."

02

Hiring key talents from Silicon Valley

All generally have AI backgrounds

The merged Skydance will launch a new leadership team.

Skydance said in a press release on Tuesday that the board of directors will also add Kraus, media tycoon Laurene Powell Jobs, and Bobby Kotick, founder and former CEO of Activision Blizzard.

Co-CEO Kraus is known for cutting costs at Mattel, where he served as CEO and helped turn Barbie from a doll into a Hollywood blockbuster.

Investor and philanthropist Laurene Powell Jobs is called "one of the great institutional builders of our time" by Chairman David Ellison. Bobby Kotick is also the only person from the gaming industry on the board, and his IP operation capabilities are seen as necessary for the company to integrate its business.

To fulfill his ambitions, Ellison has hired several key talents from Silicon Valley.

Last year, he hired Dane Glasgow, a former executive at Google and Meta, to serve as Paramount's Chief Product Officer. In May this year, Glasgow recruited Barak Turovsky, former Chief Artificial Intelligence Officer of General Motors, to serve as Head of Consumer AI. The latter previously worked at Google for more than a decade, responsible for applying artificial intelligence to some of Google's core products, including search and advertising.

In August this year, Paramount Pictures hired Nick Lee and Suzanne Pellican. Lee worked on artificial intelligence at Microsoft for four years and previously spent 16 years at Google; Pellican previously worked at Google for eight years, during which she used artificial intelligence to improve Google's advertising products. Just last week, Paramount announced the appointment of two more artificial intelligence executives.

"There is huge opportunity to use AI to transform the way users discover and enjoy watching content," one of the new hires, Nikhil Mehta, posted on social media.

This merger also marks a generational shift, as David Ellison is decades younger than many of his peers. His youth may translate into a level of technological sophistication that will set Skydance apart.

Ellison said when he took over Paramount Pictures last year: "Unless you can build a technology product that can truly compete with Silicon Valley's products, you cannot compete."

03

HBO Max and Paramount+ will eventually merge

More than 200 million DTC users

Ellison said the long-term plan is to merge HBO Max and Paramount+ into one streaming service.

He said Skydance will initially operate HBO Max and Paramount+ separately, but expects to launch a bundled service in the short term.

Skydance plans to use artificial intelligence technology to speed up the complex process of integrating HBO Max and Paramount+ for subscribers.

Ellison said the merged Skydance streaming platform will have more than 200 million DTC users and will be better positioned to compete with industry leaders.

Disney has already demonstrated a version of the integration. On May 19, it began allowing users to link their Hulu profiles to Disney+, thereby importing their viewing history and watchlist into the Disney+ app, while continuing to offer the standalone Hulu app.

As far as consumers' wallets are concerned, the outside world predicts that streaming prices may rise again, but this is less of a change than an acceleration of the status quo.

Skydance is promoting the merger as a good thing for consumers, saying consumers can "expect greater innovation from a technology-centric company, including significant improvements to its direct-to-consumer streaming products that will unify into one service over time."

Kraus said, "This is not about merging companies to reduce content, but about continuing to create high-quality content on a large scale."

04

Committed to releasing 30 films a year

IPs such as the Harry Potter series and The Lord of the Rings series are under Skydance

As part of the merger agreement, the merged company will release 30 films a year in the first two years, and 32 films a year in the following three years — otherwise it will pay a fine for failing to meet the target.

According to foreign media reports, Paramount Pictures and Warner Bros. Pictures "will continue to produce and distribute films independently under their respective brands." "This means that every Warner Bros. Pictures or Paramount Pictures film you see will carry its own logo."

Skydance has laid off the two co-chairs of the Warner Bros. film studio, who left behind 39 films. Of course, not all of these 39 films are ready, but Warner's release plan may not change significantly immediately — especially in 2026, which will most likely end with the DC Comics adapted horror film Swamp Thing, the animated adaptation The Cat in the Hat, and the highly anticipated sci-fi blockbuster Dune: Part Three.

One of the most valuable assets Ellison obtained in the merger is Warner Bros.'s library and its rich intellectual property. DC Studios, the Harry Potter series, The Lord of the Rings series, Game of Thrones series and others are now owned by Skydance.

Classic films such as Blade Runner, Goodfellas, The Goonies, The Matrix, A Nightmare on Elm Street, Ocean's Eleven, National Lampoon's Vacation and Gremlins have also joined Skydance, and these resources have great development potential. It is not difficult to imagine that any of these IPs could be rebooted or adapted into TV series to launch new projects.

Skydance has previously produced films for franchises such as Mission: Impossible, Top Gun, Star Trek and Transformers, which will undoubtedly play a role in fulfilling Ellison's promise to produce 30 films a year.

Ellison has repeatedly said that he is first a film fan and second an executive. He also made no secret of the fact that Skydance's creative direction is highly aligned with his personal tastes.

Skydance also revealed that Paramount and Warner Bros.' games and experiences divisions will be merged into one team, which will oversee projects based on various IPs, including Paramount's Star Trek, Mission: Impossible, SpongeBob SquarePants, South Park, Avatar: The Last Airbender and The Godfather, as well as Warner Bros.' Harry Potter, DC Universe, Mortal Kombat, The Matrix, Rick and Morty and Game of Thrones.

This article is from the WeChat official account "EW-Entertainment" (ID: EW-Entertainment), written by EW-Entertainment, and published by 36Kr with authorization.