Platforms For Success

Games, e-sports, product placement and betting are as much a part of the streaming calculus now as expensively acquired content that defy the economics of the theatrically-driven era. Tomorrow’s  conglomerates will be those with sufficient global scale and multi-pronged business operations to offer gigantic upfront sums for prized properties. Universal is paying a reported $400 million-plus to buy a new Exorcist trilogy, a mega-deal made possible by the involvement of its streaming cousin, Peacock. The fact that Universal’s owners are exploring an international streaming partnership with the rival media colossus behind Paramount also reflects this new business playbook.

Netflix Game-Changer

Netflix is planning to expand into video games as it seeks fresh ways to woo new customers in saturated markets while also increasing the time actually spent on the platform. The expansion also moves the streamer in closer competition with rival Amazon, whose standalone Twitch service is the undisputed champion in the live streaming of video game-playing. But critics also ask: who would want to play Bridgerton the game?

The Big Screen Test

France’s government has just decreed that streaming services, including Netflix, Disney Plus and Amazon, must invest at least 25% of their French revenues in local content if they want to show their movies just 12 months after their cinema release. Similar quotas will take effect across Europe. But a far more contentious issue than these content obligations is what IP rights such platforms may have to relinquish under the E.U.s imminent Audiovisual Media Services Directive (AVMSD).

Operation: Euro Landgrab

European production houses across the map are scrambling to achieve the scale necessary to feed the voracious content needs of the U.S. studio conglomerates and tech platforms. Such is the hunger for high-end local-language films and TV series that a new breed of powerhouse is emerging reminiscent of the British super-indies that sprang up a decade ago to satisfy what was then a global demand for English-language stories. These new umbrella groups are considerably more multilingual.

The New Italian Job

Italy is shaping up to be the latest production hotbed for the global streaming giants as part of their accelerated quest to develop or co-finance content that plays well in home markets while also finding new global audiences well beyond those language borders. But it is not just the increase in high-end TV production volume that stands out. The range of Italian content is also broadening to encompass grittier stories and more genre-driven material as a result of the streaming revolution.  

Shotgun Weddings

The library land-grab continues with Amazon reportedly in advanced talks to buy MGM for a sum approaching $9 billion—almost double what industry wisdom suggested the studio was worth as recently as last December. The news emerged hours after WarnerMedia and Discovery revealed plans for a $43 billion merger, under which their combined programming can better compete with Disney Plus and Netflix. Meanwhile, across the Atlantic, RTL Group’s M6 TV unit said it is in merger talks with domestic rival TF1 to create a $4 billion European media powerhouse involving two of the three broadcasters behind France’s SVOD platform Salto. Who will be next to pair up is the big question…

Space Jam

After a weekend of shock negotiations, AT&T agreed on Monday to shed its WarnerMedia content division into a new $100-150 billion joint venture company that will include all the entertainment assets of rival Discovery and be run by Discovery’s CEO David Zaslav. Such a spin-off would mark a dramatic reversal in AT&T’s strategy to amass distribution and production under one synergistic roof. It also sends out a clear signal that neither WarnerMedia nor Discovery feel they are enticing enough on their own to succeed in the crowded streaming arena. Many more mergers between streaming heavyweights are anticipated in this winner-takes-most battle for the world’s audience attention.

FAST Forward

The latest salvos in the streaming wars are taking place amongst the celebrity chefs, big-haired cop shows and off-beat movies being served up by free ad-funded streaming channels. These low-to-no-cost services could well hold the keys to luring the elusive post-millennial “zoomer” generation that has been shown to be particularly sensitive to price concerns. Last year, this Generation Z became the world’s largest age group, surpassing Millennials and Baby Boomers to constitute 32% of the 7.8 billion people on Earth. The fact that they also prefer gaming, music and social media to watching films and television shows is a looming existential threat that puts a potential lid on video subscription growth for big-spending streaming platforms.

Pitched Battle

Many observers see BT’s potential exit from the sports TV arena as the start of a new era of dominance by deep-pocketed streaming services in Europe, including the trillion-dollar tech giants whose latest quarterly figures once again underlined their financial firepower. With U.S.-based Verizon also looking to sell its digital media arms, it seems that telecom giants are retreating from previous ambitions to be big players in the media sector, preferring to invest their resources on building out 5G networks and servicing the entertainment ambitions of others who seem much better placed. All of which now leaves AT&T, Comcast and Spain’s Telefónica as the biggest outliers.

Netflix’s World Vision

Is Netflix starting to feel the heat from its new competitors? Does its subscriber slowdown signal the end of “Covid winner” stocks? With so much currently riding on direct-to-consumer entertainment, the streaming giant’s first-quarter earnings report, published on Tuesday, was essentially one enormous Rorschach test for analysts and business reporters. Their myopic obsession with raw subscription growth in the U.S., as opposed to subscription economics on a global basis, reveals more about their bias than it does about Netflix, whose most profitable days may still be ahead as it now chases 800 million customers on the back of local content production.