David Ellison isn’t waiting for regulators to sign off. As his $110 billion acquisition of Warner Bros. Discovery nears completion, the Paramount Skydance chief executive has his streaming teams racing to add features that could lift engagement and open new ad dollars. A free tier. Micro dramas. Comments under short videos. AI tools for quick clips. These aren’t distant experiments. Internal plans place several in testing or launch windows before year’s end.
The moves come at a decisive moment. Paramount settled an antitrust lawsuit with a dozen states on Sept. 21, clearing the final major obstacle to absorbing HBO Max, Discovery+ and a vast library of premium content. The New York Times reported the deal includes commitments to release at least 30 theatrical films annually for two years, then 32 in each of the following three, plus editorial safeguards for CNN and CBS News. Ellison told staff the transaction should close in roughly two weeks.
Yet the real work starts afterward. Executives have signaled that Paramount+ and HBO Max will eventually combine, creating a service with more than 200 million subscribers. Until then, Ellison is hardening Paramount+ and its free sibling Pluto TV. Convergence of their technology back ends, a project prioritized for months, is nearly finished. One tech stack means faster updates, better recommendations and lower costs. Staff reassignment has already begun.
An internal list of streaming priorities, viewed by Business Insider this month, reads like a checklist for competing in a market dominated by Netflix and Disney. Add a free front porch so non-subscribers can sample movies and shows. Test micro dramas, those soapy, bite-sized vertical episodes popular on mobile. Expand vertical video podcasts. Introduce interactive ad formats. Place a comments section inside the TikTok-style feed. Use artificial intelligence to generate short clips automatically.
Some items carry clear timelines. Projects tied to the free tier target the fourth quarter of this year and first quarter of 2027. Others lack firm dates but carry urgency. Paramount+ already rolled out short vertical video in April. Executives see daytime and mobile usage as growth pockets. Video podcasts offer another low-cost way to keep users scrolling.
Short. Punchy. These formats matter because attention spans have shrunk. Users flick through feeds on phones while waiting in line or during ad breaks on linear TV. Pluto TV, the free ad-supported service, has grown time spent steadily. Its upcoming refresh, built on the new unified platform, marks the biggest update in a decade. Personalization should improve. Discovery should feel more intuitive.
But. The bigger prize sits across the merger finish line. HBO Max brings prestige programming and a loyal base. Discovery+ adds unscripted volume. Combine those catalogs with Paramount’s Taylor Sheridan universe, NFL games, and Star Trek franchise, and the new entity owns scale few rivals match. Analysts have noted the settlement left streaming largely untouched. No forced divestitures. No holdbacks on combining services beyond standard regulatory reviews. Broadcast quoted industry observers saying the lack of streaming-specific concessions hands Ellison flexibility to craft bundles or full mergers as he sees fit.
Ellison has spoken of building a tech-forward company. He recruited talent from Meta and elsewhere. The convergence project, now hitting its targets, represents the first major proof point. Once complete, teams shift focus to advertising formats, user experience for short-form feeds, and video playback quality. Redeploying talent after big infrastructure wins is standard in Silicon Valley. Here it signals a shift from building foundations to optimizing for revenue.
Monetization sits at the center. Streaming price increases have pushed some households toward cheaper options. A free tier with ads could capture lapsed subscribers or younger viewers who never signed up. Interactive ads, comments that spark conversation, micro dramas that hook in minutes, all feed the same goal: more time on platform, more data for targeting, higher ad rates.
Paramount’s earnings calls this year painted an improving picture even before the merger. DTC revenue grew. Subscriber adds continued. Retention hit records in some quarters. Content like “Landman” and Sheridan’s expanding slate drove viewing. Yet the company still trails leaders in total subscribers and profitability. The WBD deal changes the math dramatically. Over 200 million gross subscribers at close. Combined content budgets that can rival Netflix. Two major studios feeding both theatrical and streaming pipelines.
Still, integration won’t happen overnight. Ellison has told employees that questions about roles, teams and daily work remain unanswered. Warner Bros. Discovery’s own leadership sent memos emphasizing a thoughtful transition to limit subscriber loss. Consumers should see little change at first. Apps will stay separate. Brands like HBO will keep their independence, at least initially.
And the competitive pressure keeps rising. Apple and Amazon pour money into originals. Netflix mastered the ad tier. Disney bundles aggressively. In this environment, features that boost daily active users matter as much as blockbuster releases. AI for clipping videos speeds social promotion. Comments turn passive viewing into community. Free access lowers the barrier for new customers.
Pluto TV offers a testing ground. Its linear channels already deliver reliable ad revenue. Improvements to its web experience went live in June. Full rollout of the converged platform for owned and operated apps followed through summer. Early data showed gains in personalization. Executives expect the same lift for Paramount+ once the backend unifies.
Financial targets reflect confidence. Paramount raised its 2026 adjusted EBITDA outlook. Free cash flow conversion looks solid. Efficiency programs target billions in savings. The studio side will keep producing 30 or more films a year, many with full theatrical runs and marketing support before landing on streamers. That strategy creates valuable IP at lower effective cost to the platform.
Executives have described films as a flywheel. Theatrical success drives awareness. Marketing budgets come from the movie release, not the streaming line. Libraries grow. Subscribers stay longer. The coming combination with Warner Bros. doubles that engine.
Challenges remain. Debt from the leveraged transaction. Potential regulatory scrutiny in international markets. Cultural integration between two legacy giants. Editorial independence requirements for news properties. Yet the streaming bet looks clear. Build engagement tools now. Unify technology. Prepare for a much larger catalog. Then compete on equal footing with the biggest players.
Ellison’s approach mixes old Hollywood with new tech habits. He greenlit series and films that deliver broad appeal. He invests in sports rights that bring live viewers. At the same time his product teams copy tactics proven on TikTok, YouTube and Instagram. Vertical video. Algorithmic feeds. Social features. AI assistance. The blend aims to keep users inside the app longer, across more hours of the day.
Whether the free tier launches as a limited test or full rollout remains unclear. Micro dramas could start small on mobile only. Comments might roll out first to select content. Timelines slip in media projects. What feels certain is direction. Paramount+ must evolve from a library service tied to linear TV schedules into a daily habit platform ready for the post-merger era.
The internal document leaves little doubt. These initiatives aren’t nice-to-haves. They form the core of how Ellison wants his flagship streamer to operate as the company absorbs one of its largest rivals. The clock is running. Deal close is weeks away. Feature launches are already scheduled. For industry watchers, the next few quarters will reveal how quickly those plans turn into products millions of viewers actually use.