David Ellison won Warner. Next up: taking on Netflix and YouTube.

Getty Images; BI Congrats to David Ellison: Two years ago, he was a movie producer. Now he is a bona fide media mogul. But buying Paramount and then Warner Bros. may turn out to be the easy part. Now Ellison has to challenge both Netflix and YouTube, and at the same time, AI is about to change what "movies" and "TV" mean. It took Larry and David Ellison two years to assemble a media behemoth. Now that they've bought Paramount, and are about to add Warner Bros. Discovery, the hard part starts: First, they have to figure out how to merge the two companies — and then they have to figure out how to compete with Netflix and YouTube. Analyst Rich Greenfield at Lightshed Partners thinks he knows the game plan the Ellisons will have to pursue: Not just bulking up his existing Paramount and HBO services by buying high-profile programming like the UFC and hiring the guys behind "Stranger Things," but opening up his streamers to stuff outsiders make. That's the core of YouTube's success story, and increasingly seems to be the direction Netflix is headed. And it seems all the more urgent to figure this out soon, before a wave of AI-generated video changes the very idea of traditional media library: If anyone with a computer can spit out a movie or a TV show, what's the value of the catalogs media companies have spent years and fortunes assembling? I talked to Greenfield for the latest episode of my Channels podcast, where we also discussed the ongoing dance between Big Media and the NFL, and why he's so bullish on Meta's new Muse. The following is an edited excerpt of our chat: Peter Kafka: David Ellison bought Warner to turn Paramount into a company that can compete with Netflix. What does he think he's building? Rich Greenfield: There's an urgency at Paramount Skydance to get to scale. They have their laser sight on Netflix. They want to be Netflix, and they feel the fastest way to get to the size and importance of Netflix was not simply investing more in Paramount, but buying Warner Bros. to get to scale as fast as humanly possible. One of these big decisions that's sitting out there is how do they actually combine all of these assets, especially on the streaming side? They've said they want to have one service. Is it all one? Do they raise the price to accommodate all of the HBO content? Do they keep the HBO brand? There are a lot of things that they're working on, and it's really hard to analyze right now because they haven't said very much since they announced the acquisition. Over the past two years, there's been chatter about using the Ellisons' tech background and resources to make streaming better. But I'm a regular Paramount Plus user — for Taylor Sheridan and soccer — and I don't see much difference so far. There isn't a lot more content yet, and that's the key problem. The two biggest streaming-TV services by far are Netflix and YouTube. I think both are successful because of their breadth of content. The more content you have, the more things you try. You really like Taylor Sheridan. I think most people watch Taylor Sheridan content or kids' content like SpongeBob [on Paramount]. But if everyone is watching the same thing, it's very hard to train an algorithm. What you really need is many different signals. That's what makes YouTube so good at discovery. That's what makes Netflix better than everyone else. It's the challenge facing all of these companies. There isn't that much diversity on Paramount Plus. There isn't that much on HBO Max either. And so putting one plus one doesn't immediately equal seven. I think the real question is, are you combining these companies and aggressively investing in substantially more content? Because both of these streaming services are undernourished and need a lot more content to win engagement and time spent per day. Just as Ellison is buying a second major studio and a second giant library, AI is making it much easier to create video. What does that do to the value of big libraries? If you talk to many of the AI video experts that are out there, they'll say generating a minute of video in the lab nearly instantaneously already exists. You may say a minute isn't a movie or a TV show, but that's the wrong way to think about it. TV shows and movies are cut into pieces — 30 seconds, a minute, maybe two minutes — and then assembled together. We're basically there. The important point is not when is the technology there, but when is it not cost-prohibitive to roll this out in mass scale. My guess is it's within the next 12 to 18 months. Maybe I'm naive, maybe it's even sooner, but it's clearly coming. There's going to be an explosion of content. I don't think all of a sudden HBO-quality content explodes, but I do think about what this means for YouTube. If I had to think about who is the biggest beneficiary of this trend, it definitely feels like YouTube, because there will be a higher quality of production. YouTube is a platform for other people's content, wherever it's m