Yesterday’s announcement of the merger of Viacom and CBS was anticlimactic. Recombining Sumner Redstone’s two media companies, which have been joined twice before in the past, has been talked about for so long that it was hard to remember it hadn’t already happened.
It also caused little excitement among media analysts. It’s hard to see how ViacomCBS, with its fledgling CBS All Access streaming service, can be a serious competitor in a battle with the likes of Netflix, Disney, Amazon, and Apple.
But it’s also hard to argue against it. By combining their content, the two media companies will clearly have more bargaining power with the giant platforms that carry that content. And as Fortune’s Aaron Pressman argues here, the merger could turn out to be bad news for Netflix. In its effort to compete in the streaming wars, ViacomCBS will have less incentive to license popular shows like NCIS and Madame Secretary, making Netflix’s content acquisition challenge even greater.
Shari Redstone celebrated the long-awaited merger of her father’s companies by saying “content is king.” That may overstate the case—distribution is still critical—but more good content at least gives the new company a stronger hand in what is shaping up to be a bruising battle.
Also this morning: bad economic news from China. Industrial production grew at the slowest rate in 17 years. Fear of further economic disruption may be one thing that’s holding back China from intervening in the Hong Kong protests.