In the phrases of the nice Tom Lehrer, “Who’s Next?“

Now that AT&T has decided to separate WarnerMedia and merge with Discovery, the remainder of the media world — notably the smaller gamers — face new strain to make their countermoves.

Even earlier than this deal, it was clear that Lionsgate, MGM, Sony Pictures and AMC Networks have been most likely too small to compete in a streaming world the place success relies upon on an enormous retailer of content material and world attain.

But ViacomCBS and Comcast‘s NBCUniversal are a lot larger, and most likely assumed that they had a while — not less than a yr — to see what number of subscribers signed up for his or her streaming choices, Paramount+ and Peacock.

“Within the subsequent two years, it should be put up or shut up for all of us,” stated David Zaslav, Discovery’s CEO who will take the top job at the combined company, in December. “Can you present you are scaling? Are you going to be a participant in the U.S.? Are you going to be a participant round the world?”

That means each will want extra content material to compete in opposition to Netflix, Amazon Prime Video, Disney and no matter the new identify of WarnerMediaDiscovery shall be.

The apparent transfer can be for ViacomCBS and NBCUniversal to merge. But a mixed ViacomCBS/NBCUniversal would have two U.S. broadcast networks — CBS and NBC — housed beneath the similar company roof. That will not fly with U.S. regulators. While the mum or dad corporations might theoretically spin out or promote them, the broadcast networks present a lot worth to each corporations — and their streaming providers — that it appears unlikely.

Further, Shari Redstone controls ViacomCBS and Brian Roberts controls NBCUniversal via his household’s Comcast shares. Their twin class share construction is one other impediment for each corporations, because it makes it laborious for outsiders to strain the corporations to make modifications the executives do not favor. But it isn’t a deal stopper — Discovery had a number of courses of shares too, however John Malone was prepared to get rid of his voting shares to get a deal finished with WarnerMedia.

Sell. They might additionally promote. Shari Redstone is extra open to the thought of promoting ViacomCBS than her father, in keeping with folks acquainted with the matter. It’s unclear if Roberts would think about promoting NBCUniversal. Potential patrons might embrace Amazon or the newly merged WarnerMedia-Discovery. Apple and Netflix proceed to hover alongside the periphery, however neither firm has ever proven a lot curiosity in making massive media acquisitions.

Reduce their ambitions. The third possibility is to throw in the towel on being a worldwide streaming service. Instead, NBCUniversal and ViacomCBS might license their content material to different, bigger streamers and wind down Paramount+ and Peacock in the event that they fail to realize world traction.

Bundle. Option 4 is analogous however much less drastic. ViacomCBS and NBCUniversal might start bundling their streaming providers collectively or discovering new streaming companions to extend world distribution via discounted choices. The foremost drawback with this technique is it limits the upside for each corporations, who will not be capable to compete with bigger gamers for high content material and breadth of programming.

The fifth possibility — inaction — is not a viable technique. The strain is on Roberts, NBCUniversal CEO Jeff Shell, Redstone and ViacomCBS CEO Bob Bakish to seek out thrilling go-forward options for his or her corporations.

Disclosure: Comcast owns NBCUniversal, the mum or dad firm of CNBC.

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