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In the fiercely competitive world of streaming, not all can survive.
“I think there’ll be a lot of consolidation,” Liberty Media (FWONK) chair John Malone told Yahoo Finance Executive Editor Brian Sozzi on the Opening Bid podcast (see the video above; listen in below). “If I had, my guess, we haven’t even seen the last big round yet, because I think social networking eventually also becomes streaming entertainment.”
Malone, a longtime media veteran known for his appetite for striking colossal entertainment deals, argues that the streaming world has “too many players” and that economic inefficiencies are becoming hard to ignore.
“The move to streaming was formed out of a need for large media companies to control the customer relationship. The problem is there’s just, realistically, there’s not room for six or even five, or perhaps even four companies to own the customer relationship themselves.” Craig Moffett, a longtime media and telecom analyst, told Yahoo Finance.
Big Tech is increasingly dominating the entertainment industry, including Amazon’s (AMZN) multiyear deal with the NFL and Apple’s (AAPL) push for original programming. Most recently, TKO Group Holdings (TKO) secured a $7.7 billion media rights deal with Paramount (PSKY) to stream UFC events, which followed Disney’s (DIS) ESPN agreement with WWE.
Platforms like Google’s (GOOG) YouTube not only compete in entertainment but also leverage the power of social networks. Malone opined that the tech giants will ultimately emerge as the winners as consolidation accelerates.
Companies like Google, Microsoft (MSFT), Oracle (ORCL), and Meta (META) can leverage vast user bases, digital infrastructure, and AI-powered algorithms. “I wouldn’t be a bit surprised to see them move on and become essentially entertainment distributors as well,” Malone said.
Disney (DIS) is also a key player, with its strong position in theme parks and core intellectual property, added Malone.
Moffett notes that successful players will be those who can consolidate and partner in ways that benefit consumers while also driving profitability.
“Consumers are struggling with the reality that subscribing to five or six different services isn’t just cumbersome and inconvenient, it’s also really expensive,” he said.
The media industry has never had a shortage of big-name personalities. One of its swashbuckling dealmakers was Malone.
