Entertainment and the Great Consolidation
Writer’s Note: While I am employed by Comcast and NBCUniversal, the opinions and conjectures made in this article are my own and do not represent the views of the company.
The first of many anticipated dominos fell last Monday, when AT&T announced it was merging WarnerMedia with Discovery, Inc. – the media conglomerate owner of popular cable channels including HGTV, Food Network, Travel Channel, and Animal Planet. The combination made sense – AT&T had long been looking to dump its acquisition of WarnerMedia, and Discovery, Inc. provided robust reality franchises that filled a potential void in Warner’s content mix and fewer legal hurdles than attempting to sell Warner to another telecom.
The question now is – who’s next? The industry was shocked when Disney first announced its acquisition of 21st Century Fox in 2017, and now the same can be said for the WarnerMedia – Discovery, Inc. merger. Rumors of the great media consolidation have persisted for years, and the COVID-19 pandemic has only exacerbated the need for traditional media organizations to scale their direct-to-consumer operations at a global level in order to compete against the tech giants of Netflix, Amazon, and Apple. With fewer pawns on the board and consumers growing increasingly frustrated by the fragmentation of the streaming market, here’s 5 big moves I see potentially on the horizon for the rest of 2021:
1. Amazon Acquires MGM – this article may not even have the time to be published before the other shoe drops on this one. As of this writing, Amazon is supposedly in final negotiations to acquire MGM for $9 Billion. Amazon Studios has released increasingly high budget original features, especially over the last year as the COVID-19 pandemic left the majority of Paramount Picture’s slate up for grabs. With Paramount itself not for sale, MGM brings the right amount of prestige fare and bankable library franchises into the tech giant’s arsenal as they gear up for their next wave of original content. The only question left is – will we see No Time To Die premiere in theaters alongside Amazon Prime in October?
2. Comcast Acquires Sony Pictures – with WarnerMedia off the table, Sony Pictures remains one of the few major studios ripe for acquisition. With valuable global franchises such as Spider-Man, Jumanji, Charlie’s Angels, Ghostbusters, and Men In Black, I imagine both Comcast and ViacomCBS will be vying to take Sony off the table. For me, Comcast comes out on top here, mostly due to ViacomCBS’ continued cross-company integration and coming only a few months off its relaunch of Paramount+; it clearly already has it hands full without having to worry about another merger. Based on the recent announcement from NBCUniversal bringing The Boss Baby: Family Business to Peacock day-and-date with theaters, Comcast clearly is ready to bring its own streaming service to the next level, and Sony’s franchises could do just that.
3. ViacomCBS Acquires Lionsgate – having long withstood the pressure of big studio consolidation, Lionsgate can only stay independent for so much longer. And with Lionsgate comes The Hunger Games franchise, a crown jewel that made almost $3 billion over a 4-film series. Not only that, but the Lionsgate library includes John Wick, Twilight, and Saw, all franchises ripe for the small screen treatment, especially aligned with the already strong young adult library of Viacom’s cable channels including MTV and VH1. ViacomCBS has one of the slickest platforms in the streaming space with Paramount+ (take a moment to really appreciate the consistent logo placement on its series thumbnails), and now only needs the right content to make it must watch.
4. Apple Acquires A24 and Legendary – Apple already has the global reach to compete and continues to provide wide access to its Apple TV platform in hopes of slowly redefining (and rebuilding) the cable bundle, so their next steps will be interesting to watch. They have an existing output deal with A24 to produce original films, so clearly have an appreciation for their consistently popular awards bait. Couple that with Legendary’s handle of producing big budget popcorn flicks, and Apple could finally have the pieces in place to breakthrough on a global level. Not only that, but Legendary’s experience in both comics & nerd content will allow Apple to enter the genre space, which have clearly played an important role in the growth of two of their major tech competitors (see: The Umbrella Academy & The Witcher for Netflix and The Boys & Invincible for Amazon Studios).
5. Netflix Acquires… Nothing - Reed Hastings has made it well known Netflix doesn’t really believe in acquiring production studios, and they have remained steadfast in building stronger creator ties and leaning into developing original or newer IP. They’ve brought Ryan Murphy and Shonda Rhimes onboard for television and have put a large investment in Zack Snyder and his zombie franchise – having greenlit both a prequel movie and an anime sequel series to his most recent film Army of the Dead. With more studios pulling their content (and IP) away from Netflix, it looks like they will continue to forge their own path on a global scale finding and cultivating exciting new shows and movies.
Honorable Mention: Comcast Acquires ViacomCBS – a popular theory of many in the industry, the complexity of this potential deal is what makes it dead on arrival in my opinion. The legal hurdles of combining such similar assets (broadcast networks, cable channels, and recently launched D2C services) was supposedly the very reason John Stankey chose to merge WarnerMedia with Discovery, Inc. over Comcast’s NBCUniversal. With Comcast’s 2018 acquisition of Sky, they have the opportunity to scale quickly on a global level – today they need the right content to get eyeballs on Peacock. While ViacomCBS would make them immediately competitive in the kids space with Nickelodeon’s deep library, Sony provides robust franchises in and of their own without the legal concern that comes along with it.
