Prepare For A Ton Of Dumb, Counterproductive Streaming Video Mergers
from the merge-ALL-the-things! dept
While Comcast’s streaming service Peacock has now reached 30 million subscribers, Comcast has been taking an absolute bath on the proposition. Comcast CEO Mike Cavanagh says the company lost nearly $3 billion dollars on the effort last year alone.
The other streaming giants haven’t fared a whole lot better. Warner Bros Discovery, Disney, and Paramount all struggled to nab a profit as they collectively (and in many cases successfully) spent a ton of money (not always particularly wisely) to compete with Netflix.
Grabbing any kind of meaningful profits here came at a cost; streaming companies that eked out a profit often did so by nickel-and-diming their subscribers in new and annoying ways (see: Amazon’s decision to charge Prime Video customers an extra $3 just to avoid new ads, or Netflix’s and Disney’s decision to harass customers for sharing passwords), risking future defections.
While the losses are usually framed in the business press as just the cost of trying to compete in streaming, there was no shortage of dumb, wasteful spending. They paid their executives exorbitant compensation well out of proportion with their competence (see: Warner Bros Discovery CEO David Zaslav). They pursued pointless mergers that saddled them with mountains of debt. Netflix even launched a restaurant.
And as usually the case, it wasn’t the executives that paid for their wild spending and bad decisions fueled by Wall Street’s demand for improved quarterly returns at any cost. In most instances, like Disney, it was either consumers or the employees that paid the price:
“Disney, the largest traditional media company, is in the midst of a gutting restructuring that has featured 7,000 job cuts and attacks from activist investors. It lost more than $1.6 billion from its streaming businesses in the first nine months of 2023, during which its Disney+ service gained 8 million subscribers. The company says it will turn a profit in streaming in late 2024.”
“Analysts,” many of which are simply looking to goose client stock valuations, are already busy insisting that more mergers are the solution. Despite the absolute madness, bloodshed, debt, and chaos that resulted from the AT&T–>Time Warner–>Warner Bros Discovery merger. Have a huge ton of debt from the last two pointless mergers? Clearly the solution is more mergers:
“Analysts said the two companies’ high debt levels were an immediate concern for investors. “We suspect investors will focus on pro forma leverage above all else,” Citi analysts wrote in a note last week. They estimated that an all-stock combination of Warner and Paramount could yield at least $1 billion of synergies.”
Warner Bros and Paramount are the first to propose merging, but they won’t be the last. But they’re pursuing consolidation not because it’s good for the brand, company, or their longer-term visions. They’re pursuing it in order to nab mammoth tax breaks and to make stock prices temporarily jump.
In reality, these mergers don’t fix the actual problem, and in many instances make things worse. Bigger debt loads get recouped in the form of higher prices and even more layoffs. Less competition also means higher prices and lower quality product. We’ve noted how over-compensated, fail-upward executives in streaming are dead set in turning streaming video into old cable TV, having learned little from experience.
As these executives pursue mindless consolidation the underlying products will get worse. In turn, customers will either migrate back to piracy or more affordable (or free) alternatives like YouTube and TikTok. At which point, as we saw in the late 90s and early aughts, over-compensated executives will inevitably blame everyone and everything but themselves.
Filed Under: consolidation, streaming, video
Companies: amazon, comcast, disney, warner bros. discovery
Comments on “Prepare For A Ton Of Dumb, Counterproductive Streaming Video Mergers”
I can’t help if wonder if a lot of these companies are throwing a lot of debt into their streaming services because they know what investors are expecting it to be that way. Netflix ended up with a lot of debt because they were producing a lot of shows and movies. But a lot of these streaming services are just the streaming arms of shows or movies that were produced for networks or theaters.
So I suspect that companies like Comcast are taking unprofitable shows that were made for NBC or failed theatrical runs, throwing them on Paramount+ and then pushing all the loss onto Paramount+ to make their other divisions look better.
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That’s… A weird but interesting case.
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There is almost certainly some Hollywood accounting going on, along with mismanagement.
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Functionally a new version of Hollywood accounting…
Re: "... companies like Comcast are taking unprofitable shows that were made for NBC or failed theatrical runs, throwing them on Paramount+"
This is not happening because ComCast (NBC/Peacock) is one company, and ParamountPlus is another company (the former Viacom with Showtime & CBS). (In terms of stock value, Netflix losses are vastest, with ParamountPlus stock value next though stabilising.)
We saw what happened with Warner Bros. merged with Discovery: Entire movies and shows—especially animated ones—went into a corporate black hole, never to be (legally) seen again because of tax write-offs. I’ve no doubt that another merger would see a lot more content get sucked into that black hole for the sake of “erasing debt”. Hell, I wouldn’t be surprised to see Cartoon Network get the axe if WBD merges with Paramount.
So, like how it started but worse?
At first most everyone licensed most of their good content to Netflix and a the stuff they thought was worthless to a few streaming services that were free-with-commercials.
Then Everyone got greedy and started their own streaming service (except a few that joined together to make Hulu).
Now everyone is about to madly buy each-other up and unify on only a few platforms. Only this time with stupid high prices AND shitty service.
So we are going back to how streaming started but with all the bad parts of cable thrown in. Did I get that right?
Re: I hope they go back to it
I don’t understand why they don’t just license their stuff to Netflix. It’s free money. They don’t have to incur any costs at all, let Netflix handle the actual annoying part of creating infrastructure and handling subscription fees or whatever. These idiots would rather ‘grow’ than just collect money on stuff they’ve already made. It’s baffling. Why do they earn millions of dollars a year again?
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But not enough money for them. By your logic, they could just as well let everyone torrent everything, and make money from advertising. Which is pretty much their historical business model, but much cheaper (no broadcasting towers or licenses).
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There is never such a thing as “enough” money to capitalism.
Re: Re: "I don’t understand why they don’t just license their stuff to Netflix."
Because for the most part (Britbox is the biggest exception being BBC & ITV) it’s not “their stuff”. They rent. Content across all streaming services has many thousands of ultimate production-company owners. Max, ParamountPus, Netflix, Amazon, etc, actually own very little. And to continue to pay rent for shows nobody is watching makes no sense. So (quite logically) their selections are being narrowed down. (BTW Peacock has a huge sports area expected to finally make a buck at Olympics time.)
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Great nickname for that one. 🤭
Re: Re: Re:2 "ParamountPus... Great nickname for that one."
Hahaha! I saw that the minute I posted. I like the Washington Post’s error correction window the most, a ten minute countdown, then chop… The one plus of ParamountPlus is it has all Showtime’s series on a level with HBO’s. Maybe there’ll be no more? Netflix series are complained about as looking cheaper and it does seem no other US streamer will have enough income flow for new quality content. (Watch Peacock for hoped-for major sports income starting from this Olympics where they will offer every minute of all the sports.)
Re: that's a myth
Netflix never had “everything.” I remember when I had Netflix streaming and DVDs, and never gave up my DVD service because there was too much that Netflix streaming didn’t have.
That didn’t change over time. What changed was, there were too few things getting put on DVD and Netflix streaming quality cratered, so I cancelled both.
The bad parts of cable: not being able to cancel easily, too many ads, high prices that make streaming look paltry and being forced to subsidize sports you never watch.
I have no idea how good or bad streaming customers service is. It’s all self-service on the website. If a streaming company makes you pick up a phone, that’s bad customer service.
I can still avoid all those problems just fine and if Warners-Paramount-NBC Universal merge, I can still avoid them. I don’t even bother to watch Paramount+ or Peacock, they can merge their heads off if they want.
Wow, you really just used AI to reword my comment, huh. Lazy prick.
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Yes, really.
As long as the decision makers are making mint, and it’s the others that are taking a bath, expect the dumb, counterproductive stuff to continue.
It is only when we can make the decision makers feel the pain for their errors that we can realistically expect any change. The problem is that modern execs have too many ways to insulate themselves from the consequences of their decisions. Until we can do something about that, the shit will go on.
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If the “business synergies” that are realized come in the form of “If we merge, we need only half of the combined executive staff!”, then it becomes a Leopard’s Merger. (Surely I’ll be the executive that survives!)
What about free options such as Sita Sings the Blues or Steamboat Willie?
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There’s a small lag time between production and availability with those.
Mega crater
Exec A… “My company is failing and losing tons of money, how about you?”
Exec B… “Mine too! Let’s join up and fail spectacularly together.”
Exec A…”Brilliant, we’ll sell it to investors as a great new idea and we’ll get rich doing it!”
The people who benefit most from mergers and buyouts are the investment bankers and lawyers who collect huge fees, and the executives who pocket bonuses. The customers are,simply rubes to be bilked, and operations and creative are just fungible peons to those in corner offices with so many mergers and IPO tombstones that they need a separate bookshelf
Value of Synergy?
One can only assume that they mean Synergy (SNRG) crypto which as of today has a value of $0.0227 USD. So over 4.4×10^10 Synergy!
I guess that’s a lot?
Math is fun.
Yay for more content vanishing!!!
It can’t go into the public domain if there isn’t a copy of it!
Content creation
There needs to be a down sizing of executives and an increase in content creators.
The executives probably don’t even watch the trash they currently stream.
Bubble time
Didn’t we get a ton of pointless wasteful mergers just as the dot com bubble was getting ready to burst?
Wow, Lets be Old hat. Never new bunny ears.
From the Old concepts of HOW to make money with Movies, then TV, then DVD’s.
We get this GREAT idea, Forget Cable, Forget Broadcast TV, Forget All the old ways you Forced Stealing money from Other smaller companies.
LETS try something NEW, Just like NetFlix. AFTER we confuse NF’ about WHAT they Should be doing and How to do it.
But the Old developed Corps, dont know how to Simplify Anything.
the real problem
People have dumped cable in favor of streaming, which means they pay less (a lot less if they just churn around rather than getting more than one at a time) and that means less money flowing back to Hollywood. Netflix, Amazon and Apple are all new competitors horning in, so even less money to go around.
When I dumped cable 11 years ago, I knew consolidations would follow. I didn’t expect it to take this long. Some of these companies are being really stubborn about sticking with a business that has collapsed out from under them.
Debt, price hikes, password crackdowns and the rest are just symptoms of the actual problem, a problem that can’t be solved because customers like paying less. The solution is what’s happening now: some competitors will cease to be.
In Spain, this seems to have started to a degree. The largest ISP, Movistar, has a TV and movie section, and a few days ago they added a bunch of random content from HBO and Showtime services. Not sure if this is a long term plan, but I suddenly have access to a bunch of titles that I’d not even realised were restricted (apparently the new D&D movie was previously exclusive to Sky Showtime, but I’d not even noticed it wasn’t part of the lineup where I normally subscribe)
At the end of the day, people will only sub to a certain number of places and most people won’t do the running around to find things. They’ll either do without, or pirate the things they thing they should get after paying a premium already. Argue with that all you want, but nobody’s paying for 20 services. They’re paying for a few and either pirating the rest or doing without.
Two sides to every coin.
Everyone ignores the good outcome of the mergers. Dc and marvel (pick your side) each under a single owner.
At award has never had as much life as now.
More movies are available today than ever before.
Sure, a few low ratings things get cut. I’ve dealt that myself. But the turn of a merger is more content that most want.
No one has pointed out anything popular that has received the ax simply from a merger.
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Because of course you think consolodating all our media, technology, and data into the hands of an increasingly smaller number of increasingly larger megacorporations is a good idea. Hope you don’t drown in the data stream.
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I’m sorry your mad magazine got cut. The thousand people who still read it are equally sad.
Still, this is reality. And much good has come from it as well as bad. The majority are better served.
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Society will not be better off with a handful of megacorps controlling everything from what we eat to what we read—and using the data we give them, willingly or otherwise, to keep us from realizing how badly we’re being controlled. Or do you really believe the world would be better off with Disney owning the overwhelming majority of all American media from TV to movies to…shit, could Disney afford to buy the RIAA? How about Comcast as the one and only American ISP? Maybe you’d like Amazon to be the only online retailer, too. I could go on, but if’n you don’t get the point: Regular jackoffs like you and I are not served, and will never be served, by the “greater good” you believe monopolies will create. After all, as that song I linked to says: The supply does not get to make the demands.
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You seem to miss the entire point. Disney does not own all media. Comcast is not the only isp.
Amazon is not the only retailer.
For every consolidation, new startups occur. Some make it, some don’t. Both technology and entertainment are filled with stories of consolidation that created exoduses that lead to new companies that did just fine.
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Startups that end up making it big—e.g., Twitter—are fewer and further between these days precisely because the bigger companies know how to edge out (or eradicate) the smaller players. And with every consolidation, the bigger companies grow even bigger and ever more powerful, with more of a say in what you experience…and how you experience it. (What’s left to do when you’ve got the monopoly? / Turn the consumer into the commodity) That you see these moves towards monopolies as a cause for celebration—as a phenomenon that will help more people than it hurts, even when we know that monopolies rarely work that way—underscores just how little you give a fuck about anyone but yourself.
Your biased ignorance is your undoing.
Name a city (pop over 100k) and I’ll show you 3 isps, at least. If not 5 or ten.
There are hundreds of independent film studios in this country alone.
Amazon will never be the only shopping choice.
And top level studios rarely kill or a (actually) popular brand completely. An independent is always in the wings to buy it off. Be it a game, a magazine, or a film property.
You have a distorted view of how powerful large conglomerates are. There are no monopolies in the US that aren’t government owned (eg post office). No antitrust breakup has ever helped the consumer in the eventual.
Again, I’m sorry your magazine died, I truly am. Gore Zone and HFX, and VHS Weekly, all died too. But they weren’t popular; they weren’t profitable. If they were you’d have a Computer Shopper or Flix or night flight style buy off.
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Last thing first: Why the fuck do you keep talking about MAD Magazine as if that is the reason you think I’m against monopolies? I didn’t care about that magazine while it was in print; what have I actually said or done to make you think I give even the smallest nugget of shit about it now?
And what about smaller cities and towns where the ISP choice is limited to two at best—do they deserve to have their choice dwindled down to one because one ISP decided to consume the other in a corporate merger?
Irrelevant. The major studios control what we see to a greater degree than you might think because they’re the companies with the huge advertising budgets and the connections with major TV networks and streamers and such. Did you see any ads for Everything Everywhere All At Once on TV while it was running in theaters? Because I sure as shit didn’t. And you’re proposing that we give those companies more of that power by allowing them to consolidate.
Even if that turns out to be true (never say never), it will be the most dominant online shopping choice for years—maybe even decades—to come. And given some of its scummy-ass business practices and a lack of consequences for that scumminess, it has enough advantages over smaller retailers that Amazon execs don’t have to worry all that much about the company losing its spot. But sure, tell me again how Amazon consolidating a bunch of smaller online retailers into its corporate fold would be a good thing.
Pretty much all major companies hold onto their IP with death grips to prevent it from falling into the hands of smaller companies and independent creators. Or do you sincerely believe that a company like Nintendo is actually willing to sell the rights to, say, Urban Champion to some small-ass indie studio only and specifically because Nintendo hasn’t ever made a sequel to (or a reboot of) that 40-year-old NES game? Shit, man, Disney twice fought to extend copyright terms so it could stop Steamboat Willie (and thus Mickey Mouse) from falling into the public domain.
You ever heard of Leverage? I’ll act as if you haven’t and spare you an in-depth summary, but it’s a (damn good) TV show about a Robin Hood–esque group of criminals who use their skills to help people by hitting back at worse criminals. The show’s creator, John Rogers, routinely did research into white-collar crime and such during the show’s run as inspiration for storylines, of course. A lot of the schemes that the team foiled in the show were based on actual crimes but toned down for the sake of television. Example: The show’s Season 3 opener focuses on a cash-for-inmates scam that was based on the 2008 “kids for cash” scandal but used adult inmates instead of children. Rogers has also talked about how the stuff that made it into Leverage was only a fraction of the white-collar crime he discovered during his research—in both amount and depravity.
Point is: What you hear about large multinational conglomerates in the press is often a fraction of what those companies are doing to maintain whatever power they possess. If anything, you underestimate the power those companies have—and you do so at your own peril.
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Because along the way it was used (I believe by you) as an example as a “popular” property that was cut.
I chose the number because you can probably come back and find some town of 100 that has no land based internet. The reality is most of the country, even nowhere, has at least 3 choices and much of it has more.
I didn’t see any advertising on tv, I don’t have broadcast or cable. It did get a good amount of coverage on the internet though.
With sites like Taste and Criticker finding films to watch is really easy and has nothing to do with the studio power.
Amazon and JustWatch both have powerful comparative algorithms. Finding stuff you want to watch is easier than ever.
I repeat, you have a very dark view of the world. Never. Unless Amazon becomes the world government they will never be the only online retailer.
Ebay has maintained a solid footing in sales exchange for over a decade. Closing out last year with nearly $280 billion exchanged according to statista and MarketWatch. Amazon has the lead in volume at 38% ($560 billion sold) but there are neck and neck in value with ebay and walmart. Walmart with $638b sold pased Amazon by a fair clip. ~macrotrends. This was actually the first time in years ebay fell more than ten percent behind Amazon.
And you ignore that Amazon’s largest volume is 3rd party.
Was on the virtual console. So less than a decade.
Steam boat Willy is Mickey Mouse. A property used daily. I don’t doubt Nintendo would license Urban Champion if someone actually offered to buy the rights. You conflate a primary property with a one off and with long abandoned material. Or did you forget the reboot of Halloween, based primarily on royalty payment?
I’ll skip over Leverage. No idea or interest in the show or what it’s based on. And head to “point is”.
We are nowhere near any foreseeable future where we go RoboCop or Judge Dredd, Resident Evil where a corporate conglomerate rules the city, or country, or world.
Again, there are no monopolies in this country. There are big companies and small companies. But we have robust competition.
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I’m fairly sure I never said anything of the sort—but even if I did, my saying that MAD Magazine was a popular property doesn’t mean I care about the magazine. It would’ve been a mere statement of fact.
Prove it.
I have a realistic view of the world based on the evidence of what capitalism has driven people to do, how governments are more than willing to let capitalists do most of their bullshit, and how people like you are more than willing to support corporations becoming more powerful because you think it’ll serve some mythical “greater good” to let companies like Disney and Amazon hold even more power than they already do. If you think my view of corporations as being inherently sociopathic and (at best) indifferent towards human suffering is “dark”, I have to wonder what the fuck makes you think corporations are your friends other than ignorant “everything is awesome” optimism.
Argue against the point I made and not the one you wish I had made, shitbag.
I do. Nintendo is a billion dollar company with a load of IP in its war chest. Shit, man, look at fuckin’ Super Smash Bros. Ultimate—including the Spirits, that game is a celebration of Nintendo’s massive archive of IP. They’re not going to give up the ghost to someone who walks into the lobby of its corporate headquarters and says “hey, we have a couple hundred thousand dollars, gib IP pls”. Shit, I can’t even imagine the kind of licensing agreements that had to be drawn up so Cadence of Hyrule could even go into development, and that’s about as lucky as any indie developer is ever going to get in terms of being able to legally play around with Nintendo IP.
No company worth a good god’s damn is going to give up its IP for anything short of an assured profit. Doesn’t matter if it’s a game studio, a movie studio, or whatever—they’re not giving up the IP if they don’t have to. Again: Disney helped extend copyright twice to keep Steamboat Willie out of the public domain; if Disney thought it could get away with that shit a third time, it would’ve done that shit a third time without even thinking twice.
Fam, I hate to break this to you, but Blumhouse didn’t buy the Halloween IP from its current owners. Blumhouse licensed that shit, and only because the IP owners allowed that licensing to take place. The IP owners didn’t have to license that property to Blumhouse at all—they could’ve said “no” and told Blumhouse to fuck off regardless of how much Blumhouse offered to pay for the licensing rights.
Tell me you’ve never heard of company towns without telling me you’ve never heard of company towns.
And yet, you’re promoting the idea that there should be monopolies in this country, as evidenced by the fact that you’re a bit too excited about the idea of Disney owning both Marvel and DC (which represent the overwhelming majority of the American comic book/graphic novel industry) because…I dunno, you wanna see Iron Man fire the Proton Cannon from Marvel vs. Capcom at Superman’s face without needing to directly pay an artist who could draw that for you?
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Not based on distribution. Advertising Now had the distribution at under 10000. That’s print, not purchase.
Name a location. That is not over 500 miles from a population centre.
No, you’re locked in a world of eternal sorrow. Where big mean monsters are behind every order. Find some joy in life.
I did, you pushed a dead property. I showed you it wasn’t. Super smash brothers is full of licensed properties too.
See, you’re not making the points you think you are. These are big IPs. And they are licensed. They are available to others.
You’re intentionally deflecting. They are few and no different than any other community grouping. Or off base housing, or student housing.
A far cry from the corporate world I noted.
Not at all. I’m stating the fact that there would still wouldn’t be a monopoly even if WBD merged with Disney (I generally dislike the DC properties btw).
There are many hundreds of independent studios in this country. Services like Prime and Tubi and MoH are quite happy to distribute their materials.
VHS is still alive and well for the dedicated audience. Just look up VHS 2023 to see new releases.
You can shop at Etsy or Facebook or Craigslist. Your local store has online pickup and delivery.
Competition exists for every mega you throw out.
If you want an alternative just look it up online.
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Yet again you fold when confronted with any real pushback.
You, and writers here, constantly talk about communications monopolies, but can’t come up with any evidence of true lack of competition.
You talk of loss of streaming options but the problem is generally the opposite. JustWatch shows nearly 100 choices in North America alone. Amazon itself supports over 50 independent and studio options.
And that ignores all the foreign companies happy to stream to us residents.
You complain of locked up IP, yet material is regularly available for licensing. Your own example proves the opposite of your claim.
Your whole end-of-the-world warning collapses under a quick targeted internet search.
It’s telling that nobody even attempted to respond to the facts above.