Prepare For A Whole Bunch Of Pointless, Harmful Mergers In Streaming By Media Executives All Out Of Original Ideas
from the growth-for-growth's-sake dept
Early last year, streaming company Fubo filed an antitrust lawsuit against Disney, Fox, and Warner Brothers Discovery after the three companies decided to launch their own joint streaming live sports venture. Fubo, in the lawsuit, claims the collective power of the three companies would stifle competition in the sports streaming space, ultimately driving up costs for consumers and lowering product quality.
“Each of these companies has consistently engaged in anticompetitive practices that aim to monopolize the market, stifle any form of competition, create higher pricing for subscribers, and cheat consumers from deserved choice,” Fubo CEO David Gandler said last year.
In August Fubo won an injunction, but that was then and this is now.
This week, Disney settled the allegations in the most American of ways: additional corporate consolidation. The company has announced it’s taken a 70% ownership stake in Fubo, which immediately proceeded to drop its antitrust lawsuit. When Ars reached out to Fubo TV, the company’s logic had taken a mysterious 180 thanks to the giant bag of money received from Disney:
“The definitive agreement that Fubo signed with Disney today will actually bring more choice to the market. As part of the deal, Fubo extended carriage agreements with Disney and also Fox, enabling Fubo to create a new Sports and Broadcast service and other genre-based content packages.”
So Fubo execs got a big bag of money, and they’ll be fine over the short term. Until the consolidated power of Disney, Fox, and Warner Bros Discovery uses their consolidated leverage to ultimately drive them out of the market in a few years, precisely as Fubo originally predicted. At which point these executives will have moved on to something else anyway.
I warned about all of this just about a year ago. Now that streaming subscriber growth has slowed, media giants are struggling to deliver Wall Street their sweet, unrealistic, bottomless quarterly growth. Since it’s impossible to add any more huge blocks of subscribers, they’ve taken to annoying existing consumers with weird restrictions (see: the password sharing crackdowns) and price hikes to goose revenues.
But the primary way they’ll please Wall Street is via more pointless and destructive mergers like the disastrous Time Warner, Discovery, AT&T kerfuffle. Major deals that temporarily goose stock valuations and drive massive tax cuts, but ultimately result in endless layoffs, price hikes, less overall competition, and lower quality product. The trajectory isn’t subtle.
Media executives like Warner Bros Discovery’s fail-upward brunchlord CEO David Zaslav are all but drooling at the prospect of unlimited merger mania under Trump 2.0. You’ll recall that Trump’s “antitrust enforcers” during his first term routinely rubber stamped massive, competition-eroding deals without even bothering to read studies on their potential impact.
And when Trump “antitrust enforcers” did act, it was usually out of petty vengeance, like when Trump’s DOJ (sloppily) sued to stop the AT&T Time Warner merger because Fox News boss Rupert Murdoch didn’t want the deal to succeed. When Trump “antitrust enforcers” act during Trump 2.0, it’s going to usually be as retribution against companies that don’t adequately coddle authoritarian power. Mob shit.
Ultimately this pointless consolidation in streaming will serve nobody but higher level executives and some investors. Consumers and workers are usually the ones that pay the price for the higher debt loads and distraction caused by pointless consolidation. They’ll respond by flocking to free options and piracy, and execs will, starting later this year, begin blaming everyone but themselves for the migrations.
There’s no end to this cycle because there’s no financial or regulatory repercussion in the U.S. for the corporate pursuit of mindless, purposeless, and clearly harmful consolidation. We pay empty lip service to “antitrust reform” and healthy markets, but when a progressive regulator actually tries to follow through and protect diverse competition, greedy men the country over cry like toddlers who skipped their mid-day nap, scaring federal regulators right back into fecklessness.
Filed Under: consolidation, mergers, sports, streaming, tv, video
Companies: disney, fubo, warner bros. discovery
Comments on “Prepare For A Whole Bunch Of Pointless, Harmful Mergers In Streaming By Media Executives All Out Of Original Ideas”
It’s great to see that big companies can still sue to silent dissident voices, and bribe competition to avoid lawsuits.
Nowadays, Al Capone could have became a great CEO.
Hilarious Title
“…Media Executives All Out Of Original Ideas”
The implication they ever had a single original idea is hilarious!
Or were you being ironic? It’s early in the morning so it’s hard to tell.
Mergers
I think there’s at least some room for mergers or consolidadtion out there. Peacock and Paramount Plus, for example, don’t exactly attract a hell of a lot of viewers.
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I think I’m actually subbed to both, as well as AMC. So much of it runs through Prime that I’m not certain what’s separate anymore. Prime’s Crunchyroll implementation is garbage, but the account works with the Crunchyroll app anyway, so fuck if I know.
To coin a term...
Flailure.
The issue being overlooked here is that, like with TV/movie streaming, sports streaming is fragmented as hell (the severity of that fragmentation depending on what sports you watch). As much as consolidation and mergers are bad, they can help reduce that fragmentation.
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Or all the different content providers could just release their content on one or multiple platforms that carry all available titles and they get paid based on views instead of intentionally fragmenting in order try to make an extra buck by making you subscribe to each one-company platform separately. You know, like Netflix was with DVDs and the doctrine of first sale.
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The content owners in the case of sports are the sports leagues. They are insanely greedy. Releasing their content to all platforms means they make less because there isn’t that juicy exclusivity premium.
The leagues want to pit the platforms against each other to drive up the fees they get as high as possible. Then the platforms drive up their prices to the moon and jam in as much advertising as possible.
I am so glad I’m not a sports fan. The obvious inevitable outcome here is: sports will belong to a few tech behemoth companies which will then charge extortionate rates for ad-glutted tiers and of course there will be no such thing as an ad free tier for sports.
DVDs have less than nothing to do with sports. Unlike other forms of entertainment, sports must be watched live and that knocks out the whole DVD concept.
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The article topic has greater implications than sports. I don’t watch sports, so I don’t care about that particular aspect of it. All the greed you’re referring to is similar to movie and tv show streaming companies.
The point is that physical media has the doctrine of first sale, meaning that a platform could distribute the media without needing a license from the content owner. Streaming requires licenses.
Not sure why you think this. Sports don’t have to be watched live unless it’s not being recorded.
Watching a recording is a common feature on streaming sports sites. For example: https://www.foxsports.com/replays.
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Remember when John Smith insisted that animated GIFs of winning goals was a violation of sports leagues’ copyright, even when that footage in question would be broadcast on free to air media? His logic was that the only part of the 90 minutes games that mattered were the winning goals, so by making a 10 second GIF of a 90 minute game you’d effectively pirated the whole thing.
nerdrage is right, I can’t imagine what it’s like being a sports fan. Of all the content consumption methods where the paying customer is treated like a criminal, sports fans have to have it the worst.
There ll be 5 big company’s that own the big movie company’s and most tv stations streaming apps this is bad for competion and workers rights of top executives will get big bonuses ordinary workers like editors writers will find it hard to make a living .
It seems big tv film executives Dont care about the future of the industry as long as they get a big bonus
This encourages more people to get Netflix’ or become pirates.
There’ could be more deals like if you sign up for 2 services you get a discount like 20 percent off
Look at all the tech company’s making big donations to trump
Its like all corporations are moving to a neutral or slightly right wing stance to avoid regulation
Meta removing moderators will have a big impact worldwide as it will not stop hate speech or anti LGBT speech
Meta seems to be following X in allowing negative hate speech
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Netflix will be one of those big five companies. The others will be Amazon, Apple, Disney and probably Warners. The Ellisons will try hard to shove Paramount in there too but the odds are against them.
Comcast needs to exit content. Sony can keep making theatrical movies if they please but the failure of their Marvel based movies calls that into question. And that’s the whole field. There won’t be any “TV stations,” those are going away like cable.
If you want a discount on getting two services, you’re in luck because all these platforms will become bundle-happy. It’s a great way for them to increase their sales vs letting people just churn thru them one at a time.
That’s actually a better deal than a bundle ever will be. Why pay anything for two services when you can only watch one at a time anyway? You could say the same about ad tiers, which are a worse deal for customers so the companies push them hard.
All these Idea most happned to the big company, So that, They are dare to take risks to maintain their respective brands.
It’s been obvious to me where this was all headed. Just look at customer behavior. They favor the very biggest platforms. It might have been 4 or 5 per household years ago but as the prices increase, the tolerance for multiple services decrease.
A lot of people apparently get Netflix and use it as video wallpaper, not caring much about what specifically they leave on the TV all day. Others seek out specific content but that just means a one month subscription, you don’t need to stick around.
Amazon, Netflix, Disney/Hulu are safe; Apple will do whatever they like; Max might be safe. The roster is full up at that point.
If the Ellisons have some magic formula to save Paramount, they sure haven’t said what it is. I think they’ll waste billions on an ego-driven exercise in futility but it’ll be an entertaining spectacle anyway.
For the most part, the rest are goners. Comcast needs to get out of content entirely, they’ve lost. Some small fry like Shudder can survive off the specialty market.
Sports is a different animal entirely because it hinges on sports rights that none of these companies own but need to compete over. I think sports will belong to Amazon, Apple, Google and to some extent Netflix. The biggest, richest companies will win all the bidding wars so how could it turn out any other way?
Yep, must be Trumps fault
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Trump’s fault?
Hell man, that asswipe aint even stgarted his run at draining the USA. Give him a couple months at least! Sheesh.
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Trump is a SYMPTOM, not the disease itself.
Unless we get our priorities straight, we are DOOMED.
Greed is a virus, not a virtue.
This nonsense is why I stick with Youtube TV. Google has drawbacks, but at least they tend to stay consistent while the rest of the pack spins in crazy circles.
mergers suck
consumers always end up getting fucked over and over because of these useless mergers. its always higher prices shittier customer service and nonstop price hikes. if anybody bribed politicians to approve mergers he or she would be locked up. media company ceos would be locked up if even $1 in legal bribery was mae a felony
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Very nice post