Big Little Buys

Content ownership has become the new industry battle-front in this streaming era. As great as it is to earn a guaranteed upfront fees, nothing beats the thrill—and financial reward—of being economically involved in a project that goes on to become an unexpected success and then keeps on giving.

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).

An Industry Transformed

New research by Purely Streamonomics, unveiled today as an eye-opening infographic, shows that streaming platforms have set the global film and TV industry on a trajectory of accelerated growth with no imminent ceiling in sight. The gross cash amount spent producing and licensing new entertainment content (excluding sports) soared by 16.4% in 2020 to reach $220.2 billion, setting yet another milestone that is on track to be surpassed again this year. Far from hitting peak production, the global streaming business is only now starting to reach escape velocity. 

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.