November/December 2019

More articles in this issue:

• The Future of Travel
• Innovation Entrepreneur Awards Celebrate Life-Changing Tech
• Health Sensing in Cars
• Quibi CEO Meg Whitman
• Biometrics: You and Only You

After the recent wave of mega-media mergers (AT&T + TimeWarner, Disney + Fox, CBS + Viacom, Comcast + Sky), even more rearrangements are coming. Hollywood is a deal-obsessed community and the lure of streaming and over-the-top opportunities is generating new creative collaborations.

As legacy media companies seek innovative startups leveraging new creative tools, analysts expect takeovers and overhauls in both the production and distribution sides of the industry. There will be more mergers and acquisitions, especially within the revived “SiliWood” — Silicon Valley and Hollywood players — and among content and hardware companies.

The reunited CBS and Viacom plan new approaches to reach the “interestingly evolving ecosystem” while maintaining their relationships in “the traditional bundled world,” according to David Nevins, CBS chief creative officer and Showtime Networks CEO and chairman. He said, “There’s going to be a lot of rebundling” during the Bank of America Merrill Lynch 2019 Media, Communications & Entertainment Conference. Nevins said in the “rapidly evolving, very hungry market,” his company will produce content for its own platforms and other distribution providers.

Legacy Media Companies

Every media empire has or will create a rival to Netflix, such as Hulu, Disney+, HBO Max and the yet-unnamed Comcast OTT service. Not to mention Apple TV+ and the video channels from YouTube and Facebook.

Hence the intense attention by producers and distributors to take on the giants’ streaming ventures or prepare to sell to them. Although it’s too early to identify how these deals will shape up, several recent moves auger the direction of the process:

• Marvel New Media and Stitcher (a content network and podcast provider) unveiled “Marvels,” a podcast series available on Stitcher Premium.
• Viu, an Asian video streaming service, is collaborating with Canada’s Wattpad (known for user-generated stories) to develop film and TV series under the Viu Original label. Wattpad also has deals with Sony Pictures Television and Mediacorp.
• Viacom-owned Pluto TV partnered with the National Football League to create an OTT channel with content from NFL Films and NFL Media, as well as season recaps and replays.
• The NFL and Reddit partnership features the ad supported “Ask Me Anything” series, featuring NFL players, league executives, team personnel and fans.
• Crunchyroll, a subsidiary of Otter Media (a unit of AT&T’s WarnerMedia) and VIZ Media Europe Group, have restructured to integrate Crunchyroll’s global platform.

Meanwhile alliances in Hollywood demonstrate the expectations for high-tech productions. For example, Walt Disney Studios and Microsoft have teamed to shift significant portions of Disney’s moviemaking and distribution processes to Microsoft’s Azure cloud platform “from scene to screen.” Another new Disney alliance involves a consumer-facing deal as well as the studio’s commitment of augmented reality (AR). In an expansion of its 2017 deal with Lenovo, Disney has introduced its “Marvel Dimension of Heroes” experience, which uses upgraded Lenovo “Mirage” AR headsets.

Collectively, these agreements suggest more changes in the digital ecosystem. And while it may be tantalizing, some analysts warn about the consequences. Ben Swinburne, head of media research at Morgan Stanley, expects more M&A activity. “This business is getting harder, requiring more capital, more global distribution and ultimately more consolidation,” he told the Financial Times. “The race for scale will lead to lower near-term profits, and we see only a handful of platforms emerging on the other side.”