Media Companies Are Ready to Sell. Does Anyone Want to Buy?

[mnradiofan]

I've said it before, I'll say it again: Barring a merger, Paramount+ and Peacock are best off shutting down their own services and becoming a tier on Amazon Prime---or just licensing their stuff in packages to the highest bidders among the survivors.

We are already starting to see this. I just watched a show that is "new" on Netflix, and is trending. Come to find out it's not "new", it released in March....on Paramount+. No Paramount+ branding was on the show. I also now see several HBO shows on Netflix. (No, Max isn't out of the woods on profitability yet).

Sony seems to be the winner here, as they didn't "attach" themselves to any one streamer and instead licensed everything out.

Kind of becoming a running joke now that if a streamer wants the shows to be seen, they should just license them to Netflix.

 

[TheBigA]

Kind of becoming a running joke now that if a streamer wants the shows to be seen, they should just license them to Netflix.

To use the music model, there should be no platform exclusivity. Imagine if Taylor Swift only licensed her music to iHeart or any one music service instead of all of them. That's the situation we have with some streaming companies. They want to retain exclusivity to drive up subscriptions, but in doing so, it's hurting viewership and profitability of their content.

 

[Kelly A]

To use the music model, there should be no platform exclusivity. Imagine if Taylor Swift only licensed her music to iHeart or any one music service instead of all of them. That's the situation we have with some streaming companies. They want to retain exclusivity to drive up subscriptions, but in doing so, it's hurting viewership and profitability of their content.

But if a particular company that also does streaming; Netflix, Apple, Amazon, Paramount, etc. spends the big dollars to create the unique content, shouldn't they expect to host it on their stream? Otherwise, seems like you'd lose control of your revenue from these big-dollar productions.

 

[michael hagerty]

But if a particular company that also does streaming; Netflix, Apple, Amazon, Paramount, etc. spends the big dollars to create the unique content, shouldn't they expect to host it on their stream? Otherwise, seems like you'd lose control of your revenue from these big-dollar productions.

Exactly. They can license it to other streamers either simultaneously or after a run.

All the content on all the platforms isn't the answer. Fewer platforms are the answer. As I've said, barring mergers we can't accurately predict, I think we end up with four majors---Amazon Prime, Netflix, Disney+/Hulu and Max. Paramount+ and Peacock probably become tiles on Amazon.

I think Apple+ already knows it has more in common with smaller streamers like AMC+, and the whole "boutique" vibe works for them. With Ted Lasso having finished its run, they're down to three original hits, The Morning Show, Severance and Shrinking, and it doesn't appear they want to build a streaming empire.

 

[TheBigA]

But if a particular company that also does streaming; Netflix, Apple, Amazon, Paramount, etc. spends the big dollars to create the unique content, shouldn't they expect to host it on their stream? Otherwise, seems like you'd lose control of your revenue from these big-dollar productions.

I understand that. You invest the money, you should get first shot. That's what we see happening. But that's part of the problem when you have companies that own both the production and distribution. In the golden age of Hollywood, movie companies owned the studios and the theaters. The courts broke that up, and the movie companies were forced to sell their theaters.

We currently have a situation where we have movie companies competing with technology companies. Both of them are investing in content creation, both of them own streaming distribution, but the technology companies' distribution system is more widespread and reaches more people than the studios. In a way, it's unfair competition.

I've brought this up in terms of broadcast radio. As things are now, radio stations are competing against audio streaming services, such as Apple Music and Amazon Music. They have their own curated radio stations. People who subscribe to their music or video services also get radio. They're completely unregulated. Meanwhile, broadcast radio is subject to FCC ownership rules, and the FCC doesn't see streaming as competition. This is the marketplace we all work in right now.

So getting back to the topic of this thread, why would any of the trillion dollar technology companies want to buy a media company. They just form one internally, use leased facilities to create content, they avoid owning all the real estate, and they bypass all the traditional regulations.

 

[TheBigA]

I just saw a promo for a new documentary on the lives of Martin Luther King and Malcolm X. It's called "Genius: MLK/X." It's obviously a high quality, high cost scripted documentary with actors portraying the two civil rights leaders. Those actors look amazingly very much like the people they portray. You might think it's for the History Channel or maybe broadcast TV. Where can you see it? National Geographic. Who owns National Geographic? It's now part of Disney. So you see it first on NG, and then later stream on Disney/Hulu. But you wonder how many people get NG, and how will they get any return on that investment? They first have to spend money to create awareness. It worked because it caught my attention. But then the need to get people to watch a channel they might not even know about.

Genius: MLK/X — release date, cast, behind-the-scenes footage and everything we know about the anthology series

Genius: MLK/X sees the spotlight shining on both of these leaders of the modern Civil Rights Movement. Here what we know about the Genius episodes.

www.yahoo.com

 

[Kelly A]

I understand that. You invest the money, you should get first shot. That's what we see happening. But that's part of the problem when you have companies that own both the production and distribution. In the golden age of Hollywood, movie companies owned the studios and the theaters. The courts broke that up, and the movie companies were forced to sell their theaters.

We currently have a situation where we have movie companies competing with technology companies. Both of them are investing in content creation, both of them own streaming distribution, but the technology companies' distribution system is more widespread and reaches more people than the studios. In a way, it's unfair competition.

But the flip side of that argument is the number of quality, award-level U.S. made movies has declined over the years because they require a much higher investment with uncertain chances of return. That means movie studios are less inclined to throw a lot of money into a movie because they can't control the distribution over time. That's just one reason is why most of the popular movies released just the last two years were financed by foreign investors. Mostly China.

Apple and Netflix, just to name a couple, took a chance by creating several wildly popular streaming series. In my view, they took the risk, so it isn't unreasonable to receive the rewards. Returns on investments don't come from giving the content away. Especially true when you can't expect to even sell ads on it.

I've brought this up in terms of broadcast radio. As things are now, radio stations are competing against audio streaming services, such as Apple Music and Amazon Music. They have their own curated radio stations. People who subscribe to their music or video services also get radio. They're completely unregulated. Meanwhile, broadcast radio is subject to FCC ownership rules, and the FCC doesn't see streaming as competition. This is the marketplace we all work in right now.

I agree that radio broadcasters are hamstrung by regulations that started in the 30's. Because of those antiquated anti-competitive regulations, I see the future for traditional radio on a downhill slide. That said; I believe the large groups like iHeart will likely survive because radio is stll free and easily available for adults. But kids used to streaming are rapidly becoming adults. It's the smaller groups, mom and pop's, which probably won't last over the upcoming ten years.

So getting back to the topic of this thread, why would any of the trillion dollar technology companies want to buy a media company.

Unless they're producing content that has a very positive ROI, they won't.

 

[TheBigA]

But the flip side of that argument is the number of quality, award-level U.S. made movies has declined over the years because they require a much higher investment with uncertain chances of return.

Theatrical distribution has declined since covid. So if you're making movies strictly for the theater (and some do), it's a huge crap shoot. The streaming platform has provided a new distribution method, so that's where the investment is now. The key to ROI is the ability to resell that content on multiple platforms, domestic and international. I saw where the actors in Yellowstone did an international publicity tour because the series was being introduced in England and Australia. So not everything is domestic.

 

[Don CT]

Just because you have a huge budget doesn’t make a movie good. Independent films are in most cases better.

 

[TheBigA]

Just because you have a huge budget doesn’t make a movie good. Independent films are in most cases better.

Some indie films also have large budgets.

 

[CTListener]

If Paramount+, Apple+ and Peacock have no future as stand-alones, what happens to the exclusive sports deals each of them has? Are we assuming that everyone uses Amazon and has an Amazon Prime (or at least Prime Video) account? How do the owners of the three services I've named feel about being just another tile in the display?

 

[Kelly A]

Theatrical distribution has declined since covid. So if you're making movies strictly for the theater (and some do), it's a huge crap shoot.

I can't think of any recent heavily promoted movies that have remained theater-only. We just streamed Oppenheimer last weekend via Netflix, in spite of it being only available in the theater for months. Top Gun Maverick after having been over a year late from scheduled release, is now available via many streamers. In both of these examples; the studios and their investors made their money back and then some from theaters. Everything after that is gravy. Will Taylor Swift's tour movie be available via streaming next? I've heard all the major players are trying to get first shot, but she hasn't shown her hand yet.
But the series' from the big three are huge investments too, and that's what get people to sign up for their stream.

The streaming platform has provided a new distribution method, so that's where the investment is now. The key to ROI is the ability to resell that content on multiple platforms, domestic and international.

But the trick is to not allow what amount to competitors to capitalize on your investment.

I saw where the actors in Yellowstone did an international publicity tour because the series was being introduced in England and Australia. So not everything is domestic.

Paramount allowed CBS to run Yellowstone, which I thought was an interesting move. On one hand by airing past streamed episodes on linear TV, you're getting a new audience hooked. On the other hand, you're diluting a percentage of the streaming audience who might be willing to wait for future seasons on the chance those will reach linear too.

 

[TheBigA]

Paramount allowed CBS to run Yellowstone, which I thought was an interesting move.

I think that was strictly about the writer's strike. They needed some promotable event for the upfronts, and that was already done.

 

[michael hagerty]

If Paramount+, Apple+ and Peacock have no future as stand-alones, what happens to the exclusive sports deals each of them has? Are we assuming that everyone uses Amazon and has an Amazon Prime (or at least Prime Video) account? How do the owners of the three services I've named feel about being just another tile in the display?

Apple+ won't be a major, but they're not now and they never really tried to be. They'll be okay as a stand-alone boutique.

The other two will feel better about being another tile in the display than they do about losing hundreds of millions of dollars every quarter.

 

[RadioGuy1864]

Theatrical distribution has declined since covid. So if you're making movies strictly for the theater (and some do), it's a huge crap shoot. The streaming platform has provided a new distribution method, so that's where the investment is now. The key to ROI is the ability to resell that content on multiple platforms, domestic and international. I saw where the actors in Yellowstone did an international publicity tour because the series was being introduced in England and Australia. So not everything is domestic.

The theatrical model has been multi revenue stream since the 1950's, starting with TV. Then came cable, pay tv, video cassettes, VOD, DVD's and now streaming. There were "windows" for each distribution modality. Then COVID hit, and basically destroyed the window system.

 

[tall_guy1]

The Year Netflix Ended the Streaming Wars It looks like Netflix is the place to "browse" whereas other streaming services if you "know" the kind of stuff you want to watch. Am I the only one that actually browses the other streaming services?

 

[michael hagerty]

The Year Netflix Ended the Streaming Wars It looks like Netflix is the place to "browse" whereas other streaming services if you "know" the kind of stuff you want to watch. Am I the only one that actually browses the other streaming services?

No. As the article you yourself posted makes clear:

With nearly 250 million subscribers, Netflix has a big lead on its competitors. (Amazon is next with closer to 200 million—though some of that has to be attributed to streaming being offered with a Prime shipping subscription—while Disney+ trails with some 150 million and services like Max, Hulu, Apple TV+, and Paramount+ lag behind with under 100 million.)

 

[Kelly A]

The Year Netflix Ended the Streaming Wars It looks like Netflix is the place to "browse" whereas other streaming services if you "know" the kind of stuff you want to watch. Am I the only one that actually browses the other streaming services?

Yes, you are the only human being on the planet earth that browses other streaming companies offerings. Everyone else is only looking at Netflix.

 

[Theater of My Mind]

Yes, you are the only human being on the planet earth that browses other streaming companies offerings. Everyone else is only looking at Netflix.

You may be closer to the truth than you think.

It’s “shakeout” time as losses of Netflix rivals top $5 billion

Disney, Warner, Comcast, and Paramount are contemplating cuts, possible mergers.

arstechnica.com

 

[michael hagerty]

You may be closer to the truth than you think.

It’s “shakeout” time as losses of Netflix rivals top $5 billion

Disney, Warner, Comcast, and Paramount are contemplating cuts, possible mergers.

arstechnica.com

This is a regurgitation of a Financial Times piece that itself was based largely on one analyst's opinion on CNBC 12 days ago. It waits until paragraph 14 to note that Max is profitable and doesn't mention that Disney+ is likely to be when it launches the single platform that will hold it and Hulu.

As I've said (a bunch) the losers are Paramount and Peacock. There's the shakeout that's coming, apart from any merger we can't accurately predict.

I suppose the takeaway is that legacy media screwed up their efforts at streaming (apart from Disney/ABC). But that ignores that it was legacy media that founded Hulu (Newscorp/FOX, NBCUniversal, and later Disney/ABC), which is and has been profitable for a decade.

The real lesson here is that every studio and network did not need its own streaming platform, the market couldn't support that many and that the costs involved in becoming competitive in terms of scale with Netflix and Hulu overnight (including loss-leader pricing to attract subscribers) were simply too high.