After Settling The Strikes, What’s Next For Media Moguldom?

The soon-to-be-formal settlement of the SAG-AFTRA strike, bringing actors alongside their writing brethren back to work, is unvarnished good news for a legacy media business that has had precious little of it in 2023 (or 2022 or 2021 for that matter). It took more than a little elbow grease from media moguls such as Bob Iger at Disney and David Zaslav at Warner Bros. Discovery
WBD
, Bob Bakish at Paramount
PARA

PARA
(along with Netflix’s
NFLX
Ted Sarandos) to get it done. But those media leaders can hardly take a victory lap with a huge pile-up of challenges that demand much-needed attention and can no longer wait. Here’s where I’d start.

M&A: Better yes but bigger? Maybe not

M&A has hardly been the meta problem solver for the legacy media world in recent years. AT&T
T
overpaid wildly to create a vertically integrated media giant with Warner Media and defeated the federal government in court to do it, only to sell off Warner Media to Discovery just a couple of years later. Before that deal even closed the market started speculating on the need for the next Warner Bros. Discovery (WBD) target. Disney bought Fox in what looked like yet another M&A coup for Bob Iger, but after a tumultuous CEO shift back to Iger, Disney is now rethinking its whole business structure. Viacom and CBS, after parting years earlier, reunited in a match that has hardly excited the financial markets or secured Paramount’s future.

Unfortunately, if predictably, hand in glove with these M&A frustrations have been waves of cost-cutting. WBD has been cutting flesh as well as bone since the merger and it’s still never enough to satisfy the financial markets thirst. Layoffs abound throughout these companies but it’s all a treading water story, not about reigniting growth. Despite its inglorious recent history, M&A must still and again be a critical agenda item for legacy media’s leaders.

But this time this time around M&A won’t and can’t just be about scale. Discovery doubled down on more cable networks with Scripps and the Turner networks and Disney added FX and its brethren and all of that has just saddled the parents with more complexity of what to cut. I also don’t expect it be result in a swift sell-off of major media companies to Big Tech. Amazon
AMZN
, Google and Facebook are all facing significant government regulatory headwinds and don’t need the bipartisan knives that would come out on these deals right now.

No, instead I would advocate more of a scalpel than a bulldozer approach. Iger is right to look at strategic partners for ESPN. Sports leagues and owners have a stake – even if not formal – in ESPN’s success and unlocking the next generation of growth. This isn’t unheard of – the film business has for years partnered with a range of outside investors globally to fund film production. The time has arrived to start dropping and/or combining cable networks that are so rapidly losing viewers, ad dollars and the interest of cable companies. And the capital structure of the broadcast business simply may not make any sense inside of large publicly traded horizontally integrated media companies anymore. Better to look to private equity or a consolidation inside of pure-play broadcast station groups (which may be a way station to private equity). None of it is as sexy as the edifice complex of building media giants, but it is the only way to rationally focus on true growth opportunities.

Remember the consumer? Build a rational streaming world

Netflix’s run as financial market darling and the rush by major media companies to launch their own direct-to-consumer streaming offerings ironically left many consumers out of the equation. I’d be focusing heavily on what the next generation of the streaming world should look like and focus on several key elements.

First, there are just too many independent services. And I’m not even talking about the 10,000 streaming apps that you can find on the Roku store. Consumers for years figured out how to watch content from many suppliers and in many genres when it all came from the cable company. Maybe those same cable companies are actually a good platform for packaging these services, and I’d look to the recent Disney-Charter deal as the prelude to a more comprehensive packaging approach.

Consumers can figure out how to find both kid-friendly content and horror films from the same streaming service. Disney is right to combine Hulu and Disney+ but that’s just a start. It’s going to take a combination of creative dealmaking and some checking of egos at the door to combine services that are going to struggle independently whether its Peacock, Paramount+, Discovery+ or CNN+ (oh wait, that’s now CNN Max and is a part of HBO Max, I mean MAX). And it will take bundle pricing (remember cable?) to get the consumers to stick around rather than flit in and out to find their favorite show.

And please – can we get some investment in content discovery? Remember Springsteen’s 57 Channels (And Nothin’ On)? How can there be literally thousands of choices of what to watch but it often feels like nothing you want to watch? Let’s make it easier to search for content and to surf content between streaming services (back to that packaging thing). All of this should be infinitely easier in a digital world than it was when everything was analog – and somehow it isn’t.

Content may still be King, but only if it’s good

I feel like I might be piling on with this point, but there’s a reason certain movies and streaming programs are hits (however that is now defined) and others are clearly not. Barbie, Oppenheimer, Five Nights at Freddy’s, Taylor Swift the Eras Tour and Killers of the Flower Moon are as far-flung in genre, creative teams and core demographics as could be but they all represent content that audiences loved and none of which were the umpteenth iteration of the same franchise. Maybe a more broadly curious development process refocused on new stories and settings, whether from the international marketplace and its creators or even from AI, can open up the aperture to redefine what makes something a good story to tell.

At the end of the day media companies exist to create, distribute, and monetize valued content (sorry Martin Scorcese). That word doesn’t mean the results should be generic or the product of an ever-growing pipeline to be filled incessantly. Look at the emotional impact of the death of Matthew Perry, everyone’s “Friend.” An engaged audience will forever be grateful and loyal to content that moves it. Let’s have more of that.