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Businesses Movies Television Entertainment

Disney, Warner, Comcast, and Paramount Are Contemplating Cuts, Possible Mergers (arstechnica.com) 100

After losing more than $5 billion in the past year, the world's largest traditional entertainment companies -- Disney, Warner Bros Discovery, Comcast and Paramount -- are contemplating cuts and possible mergers to ultimately help better compete with Netflix. The Financial Times reports (via Ars Technica): Shari Redstone, Paramount's billionaire controlling shareholder, has effectively put the company on the block in recent weeks. She has held talks about selling the Hollywood studio to Skydance, the production company behind Top Gun: Maverick, people familiar with the matter say. Paramount chief executive Bob Bakish also discussed a possible combination over lunch with Warner CEO David Zaslav in mid-December. In both cases the discussions were said to be at an early stage and people familiar with the talks cautioned that a deal might not materialize.

Beyond their streaming losses, the traditional media groups are facing a weak advertising market, declining television revenues and higher production costs following the Hollywood strikes. Rich Greenfield, an analyst at LightShed Partners, said Paramount's deal discussions were a reflection of the "complete and utter panic" in the industry. "TV advertising is falling far short, cord-cutting is continuing to accelerate, sports costs are going up and the movie business is not performing," he said. "Everything is going wrong that can go wrong. The only thing [the companies] know how to do to survive is try to merge and cut costs." But as the traditional media owners struggle, Netflix, the tech group that pioneered the streaming model over a decade ago, has emerged as the winner of the battle to reshape video distribution. "For much of the past four years, the entertainment industry spent money like drunken sailors to fight the first salvos of the streaming wars," analyst Michael Nathanson wrote in November. "Now, we are finally starting to feel the hangover and the weight of the unpaid bar bill." For companies that have been trying to compete with Netflix, Nathanson added, "the shakeout has begun."

After a bumpy 2022, Netflix has set itself apart from rivals -- most notably by being profitable. Earnings for its most recent quarter soared past Wall Street's expectations as it added 9 million new subscribers -- the strongest rise since early 2020, when Covid-19 lockdowns led to a jump. "Netflix has pulled away," says John Martin, co-founder of Pugilist Capital and former chief executive of Turner Broadcasting. For its rivals, he said, the question is "how do you create a viable streaming service with a viable business model? Because they're not working." The leading streaming services aggressively raised prices in 2023. Now, analysts, investors and executives predict that consolidation could be ahead next year as some of the smaller services combine or bow out of the streaming wars.

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Disney, Warner, Comcast, and Paramount Are Contemplating Cuts, Possible Mergers

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  • Need more choice and not forced into big packages.

    At the very lest make ESPN AN PREMIUM CHANNEL!
    and make DISNEY CHANNEL AN PREMIUM CHANNEL again.

    • Re: (Score:3, Insightful)

      We need real antitrust enforcement in this country, and screw the "light-handed regulation". We've been doing that since Reagan, and look at this place now.

  • by Anonymous Coward

    They are obviously too woke, so they should try the following:

    • A remake of "Gone with the Wind", but this time more sympathetic to the slaveowners.
    • Dramatize Donald Trump's brave fight against the Central Park Five.
    • Remake ST:TOS, but without the politically correct characters like Uhuru and Sulu
    • by Powercntrl ( 458442 ) on Friday December 29, 2023 @06:39PM (#64115809) Homepage

      Remake ST:TOS, but without the politically correct characters like Uhuru and Sulu

      You're forgetting Pavel Chekov. It was quite a statement at the time to have a Russian character who wasn't a "bad guy" on a TV show.

      • We also had Illya Kuryakin (played by David McCallum) in series "The Man From U.N.C.L.E." At a time when Cold War sentiments prevailed, these characters helped to humanize a perspective on Russia. Sadly, that has been squandered.
  • Star Trek IP (Score:3, Interesting)

    by Rick Schumann ( 4662797 ) on Friday December 29, 2023 @05:57PM (#64115693) Journal
    All I have to say on this subject is: I do NOT want Disney to somehow end up owning CBS/Paramount and owning all rights to Star Trek. I can't imagine what the damned Mouse would do to it.
  • by Rosco P. Coltrane ( 209368 ) on Friday December 29, 2023 @06:00PM (#64115701)

    I think I'll see all news, television and entertainment companies being owned by one single owner in my lifetime, and I'm not that young. Already the number of newspaper owners is frighteningly small. So is the number of agro companies...

    This is exactly like in the Soviet Union: many brands, many newspapers, many magazines, but same owner behind them all, giving only the illusion of freedom and diversity. The only difference being, when the state owns all the brands, it's called communism. When it's gigantic corporations in bed with the state, it's called fascism.

  • by Opportunist ( 166417 ) on Friday December 29, 2023 @06:14PM (#64115739)

    Simple: Don't do it.

    License your crap to them and rake in the bucks. Nobody is going to sign up to your streaming service for your particular little niche. License your show to them and watch the money roll in. Try to compete with them and burn another 5+ billions.

    Your choice.

    • Yeah it's funny how all these companies pulled back their IP, thinking they were gonna get rich running their own streaming channel. Now they're discovering that doing so profitably takes a lot more content than they have and that coming up with additional, actually decent self-produced stuff is harder than it seems (and very expensive to boot).

      • Yeah it's funny how all these companies pulled back their IP, thinking they were gonna get rich running their own streaming channel.....

        ... with a small set of programs offered at a monthly rate comparable to Netflix.

      • "But they CLEARLY only signed up with Netflix to watch OUR show!"

    • by Local ID10T ( 790134 ) <ID10T.L.USER@gmail.com> on Friday December 29, 2023 @07:36PM (#64115883) Homepage

      One upon a time...

      There was one streaming service (Netflix) and they had licensed (most) everyone's content, and customers were happy to pay Netflix, and Netflix was happy to pay the content creators.

      The content creators saw this and felt that they could cut out the middleman (Netflix) and keep all the money for themselves, so they started their own streaming services and made their content exclusive. Customers were not happy, because the things they wanted to watch were no-longer available on Netflix, and they had to subscribe to a bunch of other services to see shows.

      Then came the realization that unhappy customers were just jumping from service to service giving each a little money, but not enough to cover the costs of running the streaming services.

      And so the consolidation began. The deep pockets buying up the lesser operations until there was only Disney... and Netflix, who was still making a profit streaming whatever they could license or make in house.

      • You skipped to nearly the end there.

        Once upon a time, movie studios owned their own theater chains, with exclusivity down to the actors themselves. Radio stations were linked into networks so successful they remained roughly in place for a century including through the transition to TV instead. But the evil government forced the movie studios to divest their theaters and accept distribution contracts from other parties. And the evil government forced the TV studios not to make extra money from syndicatin
    • by AmiMoJo ( 196126 )

      They probably don't want to be beholden to Netflix, because if they were Netflix they would use their dominant position to squeeze the other networks and lowball them on licensing fees.

      • Setting up a streaming service is heaps easier than setting up a TV network. And they all have experience with the latter. If they got lowballed to the point where running your own show (and signing up the rest of the disgruntled suppliers of Netflix) was more interesting, you'd see this happen.

        What we see happen instead is every network trying to set up its own little fiefdom again, like they did with TV networks. The difference here is that the customer gets those networks bundled, and thus doesn't care t

    • by tlhIngan ( 30335 )

      License your crap to them and rake in the bucks. Nobody is going to sign up to your streaming service for your particular little niche. License your show to them and watch the money roll in. Try to compete with them and burn another 5+ billions.

      They won't license their crap because they need more competitors.

      The TV and movie content industry isn't going to repeat the iTunes Music Store problem. They saw what happened and what it took to get break Apple's monopsony (when there's only one consumer, it's a rev

      • There's a small but important difference here: Netflix has no control over the customer end of the bargain. You cannot "lock down" the TVs, computers and whatever other device people use to watch streams to Netflix only. This is what made the Apple Store the dominant distribution service. Customers had a device that would make them prefer this store, and IIRC it was the only way you could DRMify your music if you wanted it to play on a iPod, so studios had the choice of either letting customers actually use

    • Exactly!

      Be whores and license your content far and wide. Cut deals with whomever will pay. Use those studios on a contract basis to do filming for the other putzes that still want to create and show their own stuff.

      That way, you're getting mailbox money in the form of royalties, residuals, and studio filming / usage fees.

      Attracting sufficient eyeballs and subscribers is someone else's problem now. "What's that, the overhead on the new movie was higher and not a lot of people watched it? Fuck you, pay me

  • It was predictable (Score:5, Insightful)

    by Baron_Yam ( 643147 ) on Friday December 29, 2023 @06:25PM (#64115765)

    You can't get people to pay as much for your streaming service as they did for a cable package... for one thing, you only have a fraction of the content and they're splitting their money across multiple services.

    The natural end of this is one streaming service that licenses material from many content producers. The only reason Netflix produces its own is because all the producers tried to corner the streaming market themselves - and that isn't going to work... at least not so long as they all insist on charging so much.

    I'd argue that beyond that, they will end up using a consignment/royalty model and Netflix will end up being the streaming supplier of everything from the latest blockbuster movie to what would previously have been your local public access channel. Who cares how much they have when storage is inexpensive and they only pay when someone streams it?

  • Hmm (Score:5, Insightful)

    by Anonymous Coward on Friday December 29, 2023 @06:31PM (#64115785)

    Experiencing some narrative dissonance here. We were told how all the Netflix competitors were going to eat Netflix's lunch: the party is over, the grownups are at the helm now and Disney et al. are about to put Netflix in its place. The back catalogs and studio prowess of the great media empires were insurmountable and Netflix can't possibly make enough content to compete. All those stories from WAPO, Kiplinger, FT and the other groupthinkers are still around from late 2022 and early 2023.

    Netflix made $4.5b in fiscal 2023.

  • by HnT ( 306652 ) on Friday December 29, 2023 @06:35PM (#64115797)

    What is especially remarkable: all these giants completely failed with pretty much the absolutely biggest franchises that film and TV has ever seen. And they failed HARD.
    It cannot be an easy feat to ride e.g. StarWars and StarTrek so completely into the dirt and fail so utterly to fascinate a new audience with such beloved material to work with.

    • Most Star Trek fans like the new series, myself included. Is the new Trek too woke? It's not like the original series had an episode about people who were literally half black and half white fighting. Or Riker having a fling with a species with only a single gender. And let's be real here. Garrick was definitely attracted to Dr. Bashir. The actor even says so in the documentary! How about a species that has a symbiotic relationship with a host and changes genders. Isn't that crazy!

      • You've found exactly the thing, though.

        Paramount had ONE SHOW that I wanted to watch. And a lot of backlog that I'd seen.

        Amazon Prime had ONE SHOW that I wanted to watch. And a lot of fluff that I didn't care about.

        If the service only has the one show, once the season is over, so am I. So... using streaming services serially. Streaming them, as it were.

      • Most Star Trek fans like the new series, myself included.

        ST:D could've been better. Big problem was that it felt like some other sci-fi series with the "Trek" name slapped on it. I wondered WTF happened until Lower Decks and Strange New Worlds came out, then it was obvious what all the writers who actually were familiar with Trek had been working on.

    • I suspect they figured "hey, it worked for us with cable". But they didn't think about the additional complexity that comes with running your own streaming service.

    • by AmiMoJo ( 196126 )

      What are you talking about? Star Trek is going strong with SNW and Lower Decks. Discovery had a good run, and there is also a movie coming. Prodigy season 2 should be great as well.

      • Prodigy is the problem. Paramount wanted to save $$$ so they cancelled it. Fine. But they also REMOVED it. No watching the reruns until you bought the discs or Netflix snapped it up. That points to a fundamental problem in the business model. Having your own content on your own service should not be a net negative.
        • by AmiMoJo ( 196126 )

          That's true. I'm glad season 2 will air, but it's such a shame what happened to Prodigy, because it's actually one of the best Trek shows. It really is proper Trek, with the core Trek values and spirit.

    • Mandolorian, Clone Wars, Ahsoka, etc, are still pretty solid.
  • ... emerged as the winner ...

    A walled-garden works only when it has a time-saving benefit that a multi-vendor service doesn't.

    These media groups thought they could sell a few old movies for the same price as modern movies. Thought that, now the revenue stream skips a middle-man, they can make any piece of junk and turn a profit. Netflix learnt first, it can't make any old thing, even when there's a quality script and cast.

    Media groups are learning they can't own the internet the same way they can own and sell cable services.

  • by williamyf ( 227051 ) on Friday December 29, 2023 @08:02PM (#64115923)

    ... and buy one big Film+TV conglomerate, just like Amazon bought MGM.

    Either Paramount (most likely target), WBD, or, if push comes to shove NBCU.

    You see, those guys have a few things that Netflix lacks. First and foremost, they know how to say no to producers, and do not greenlight each and everything that lands in their desk. Netflix greenlights pretty much everything, so much so, that they have become the but of jokes.

    https://www.youtube.com/watch?... [youtube.com]

    Which in turn leads to another problem, since they approve so much crap, they have to cancel a lot of shows, which earns them the ire of whatever vocal users who were watching said show.

    Also, having an outlet (i.e. TV channel) where to air "Netflix Exclusives" after a while may help those shows to increase their reach, making people perhaps stream the rest on netflix.

    Finally, all those movie studios (WB, Paramount & Universal) have a good deal of "tentpole franchises" and IP, which is something that netflix still lacks after all these years...

    Sooo, there is that

    • Isn't this saying Netflix should do what all the loses that lost money are doing? They're making new content across the board, and it seems to have paid off a lot more than others trying to milk old content.
      • Isn't this saying Netflix should do what all the loses that lost money are doing? They're making new content across the board, and it seems to have paid off a lot more than others trying to milk old content.

        Not really. Let's use Paramount as an example, since it is the one already on the chopping block:

        * Paramount+ is loosing money hand over fist, dragging the rest of the units with it. That will be super-easy to fix, as that service (along with the subscribers and content) will be subsumed into Netflix sooner rather than later. Same thing WB and Discovery Did. Netflix subscribers will not abandon ship because they get more content now (unless the extra content is acompanied by an egrerius price hike), and per

  • Consumers are choosing the ad free streaming option? I'm shocked. Maybe the traditional media companies will learn... but probably not.
  • Hey olds, the game has changed. For those who are 25, itâ(TM)s 90% TokToc and Youtube and maybe 10% Netflix. Itâ(TM)s not going to change back. The revenue shrinking isnâ(TM)t close to being finished for the traditional media companies.

  • The only service I pay for is Netflix and it's because they bring NEW, VARIED content that my grown kids and me watch ! All the other streamers have limited content that I want to watch and then I'm done with them when I tried them in the past. Usually now, I can watch ANY of their stuff for free, streaming from internet sites. So, I will never pay for them again, ever ! Not watching their woke shows. They got greedy ! I cut DishTV over 10-12 years ago when I learned where to stream any sports I want for
  • All these companies with huge catalogs thought they could easily dominate the field of streaming services. The flaw in their plan was lots of completion, the user base would be marginalized. Personally, I tried a couple of different streaming services, one at a time. After I watched the content I wanted, then closed the account and moved to the next. lather, rinse repeat. I'm not going to pay for 15 different services when there's limited interesting content in each. Throw in the writers strike, and
  • If these companies took the time to invest in well made content and focus on their customers rather than racing to the bottom to mimic Netflix and squeeze as much profits out of what they already have then maybe they wouldn't be in this position. They literally treat their customers like chattel and expect them to just keep paying "Just a little bit more" each year. Also playing games with the content that people want to watch like removing it from their services just to get better tax breaks. It's all t

  • Wake me when the cgi comic book superhero trope
    is finally abandoned. Until then, it's HBO all the way.

  • Disney's recent business model has been to buy up every competitor it could. That's meant acquiring Marvel and Star Wars, among others. They've been spending vast amounts of money to buy things at inflated prices that it turns out they can't manage as well as the previous owners did - and the previous owners had been in a slump even before they sold. I'm not exactly shocked to discover such a strategy leads to losing money. Or that Disney's proposed solution to the losses its to grow even larger.
  • If I pay, I don't want ads. (For that matter, even if I stole it, I still don't want ads.) My teenager has demonstrated so many times that sailing the high seas is often just as fast and just as good as the paid experience. Of course I strongly admonished him/ sternly rebuked him/ cast a disapproving eye upon him. If customers aren't buying, maybe they're sick of ads. And franchise movies.

"It's like deja vu all over again." -- Yogi Berra

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