As a seasoned media enthusiast with over three decades of witnessing the ebb and flow of the entertainment industry, I find myself intrigued by the recent corporate restructuring moves of Comcast, Warner Bros. Discovery, and Disney. It’s like watching a high-stakes poker game where the chips are not just money, but the future of iconic brands and content.
Financial complexities aren’t usually captivating for major Hollywood figures, yet the latest strategies of Comcast and Warner Bros. Discovery, along with a significant choice made by Disney last year, are subtly revealing the intense discussions happening behind closed doors in media companies’ boardrooms throughout the industry.
It’s clear that Comcast’s plan to separate (most of) its cable channels and Warner Bros. Discovery’s strategy to divide their linear cable channels from their studio and streaming businesses are primarily driven by the possibility of future business deals and financial manipulation on Wall Street.
However, while there’s a hint of potential deals in the CEOs’ gaze, a stark truth surfaces: Due to cord-cutting, the worth of their assets is steadily decreasing each day. Yet, a select few – perhaps only a handful – may find themselves more valuable after navigating through this current chaos than they were previously.
Which is why these companies are hoarding them, even as they contemplate larger deals.
A cursory look reveals some recurring elements: Studios, be they for films or television, are prized treasures, serving as the heart of these companies’ content creation machines and a wellspring of creative ideas. Movie studios, specifically, are perceived as valuable brand-builders in an era where intellectual property remains highly sought after.
Just as broadcast networks are highly valued for their well-known three-letter brand names, extensive reach, and significant presence in sports and news coverage.
Moreover, a handful of lesser-known cable channels have been designated as prized possessions, and their corporate owners remain optimistic that they can endure should a major cable television disaster occur.
As a devoted admirer, here’s my take:
Warner Bros. Discovery (WBD) is also tactically moving HBO, a highly recognized brand from the era of traditional cable TV, into the realm of streaming and studios. For WBD, HBO is more of a prized gem than an asset to be stored alongside the dwindling cable networks.
At Comcast, the company plans to separate its cable services, retaining its TV and movie production studios, Peacock platform, and a few selected linear channels such as NBC and Bravo. The rest of their channels including USA, MSNBC, E!, and Golf Channel will be transferred to SpinCo.
Clearly, NBC is our leading broadcasting network, and next year it will significantly boost its sports content by incorporating NBA and WNBA matches. On the other hand, Bravo has successfully carved out its unique identity, thanks to series like The Real Housewives and Below Deck (often referred to as “high-end reality TV”), which have significantly contributed to Peacock’s viewership according to sources privy to the data.
The bet is that even if cable TV vanishes, Bravo the brand can survive.
Meanwhile, corporations such as Disney and Paramount haven’t undergone a structural overhaul similar to Comcast or Warner Bros. Discovery. However, they’ve hinted at their focus on certain subsidiaries rather than others through subtle indications.
As a gamer last year, I found myself caught up in a heated argument between Disney and Charter Communications, the nation’s leading pay-TV provider, over a horse-drawn cart (figuratively speaking). They finally reached an agreement, but it resulted in some popular cable channels like Freeform, FXX, and Disney Junior being booted off the airwaves. At the same time, they secured rates and continued carriage for heavyweights such as ESPN, ABC, and Disney Channel.
After finalizing the agreement, Dana Walden from Disney Entertainment expressed that we have safeguarded our main sources of entertainment,” she told THR. “These channels are crucial to our profitability and they supply us with a steady stream of family-friendly and general entertainment content for our direct-to-consumer services.
As a devoted admirer, I’m eagerly anticipating the future of Skydance at Paramount, which will officially be sealed next year upon deal completion. The iconic film studio under the Paramount umbrella is undoubtedly secure, but when it comes to television, things get a bit more intricate.
The incoming president, Jeff Shell, expressed to reporters during the summer that he considers CBS as a “shining gem,” although he sees room for improvement in terms of managing it more actively to boost cash flow. Additionally, he shared a strategy to position Paramount+ as a leading force in streaming, potentially through partnerships with other industry players.
Instead, it’s clear that the traditional Viacom cable networks such as MTV, Comedy Central, Nickelodeon, and BET hold a lower priority for the company. Post-merger, there are strong indications that the company might streamline its television networks, possibly by divesting or selling some of these cable channels. CBS, however, is an exception and will not be part of any such changes.
2025 looks set to be a significant year for transactions, with the anticipated completion of the Skydance-Paramount merger, the Comcast split-off, and other possible partnerships on the horizon.
Besides WBD, it’s likely that other media companies might decide to sell some of their cable TV networks. This could lead to a powerful consolidation process in the industry, allowing for stronger negotiations during affiliate and advertising discussions, as well as creating potential synergies with these combined assets.
It appears that the biggest players in the entertainment industry have already chosen who will succeed and fail, keeping their preferred divisions secure, while allowing others to fend for themselves.
In today’s streaming-centric world, it’s clear that brands and studios continue to hold significance. However, the core businesses in the entertainment industry are now facing challenging decisions as they strategize about where to invest their resources.
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2024-12-23 17:25