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Issue link: https://digital.macdirectory.com/i/1420529
out its 5B and fiber broadband services to remain competitive. Who knows, they may even take another page from the competition and develop a range of bundled streaming services to offer/entice customers. Bundles make sense … when they’re priced with the consumer in mind. They keep consumers watching stuff in the service provider’s walled garden instead of checking out the new service. What the short-lived AT&T-Warner nightmare did validate is that the entertainment industry is so idiosyncratic that conquering or reshaping it is nearly impossible. While the challenge of repairing WarnerMedia’s/HBO Max’s relationships won’t be a walk in the park, the head of the new organization, David Zaslav, is imminently qualified for the task. Over 15 years, he built Discovery into a firm with excellent assets and has been working to get the best Warner people to stay despite his goal of cutting $3B of annual costs (layoffs). During the merger announcement, he noted, “This is a business built on relationships and I’m old enough to remember that when I started out, if you could spend time with anyone in the business, you’d want to spend time with [Time Warner founder] Steve Ross. He was the guy who gave people the freedom to tell the stories they wanted to tell. He created a lot of value for Warner Bros. He really set the standard for how these businesses should be run.” JPMorgan’s annual media, communications conference highlighted that even the unique entertainment industry continues to be different and the same. Warner’s Ross would have spent time with Disney’s Igor and AMC’s Aron working on the coming two year’s theatrical window calendar and then letting the other studios negotiate the other film opening slots. This year, the two organizations and other M&E firms discussed how they were juggling their creative content work and weighing which projects they were acquiring/planning, how they were leveraging/balancing their national/international subscription services, PVOD efforts and theater openings to optimize their global consumer expansion. During the virtual event, Disney’s Chapek outlined a more humble and increasingly customer-focused organization. “We learned flexibility is good,” he noted. At the same time, he highlighted that consumer behavior has changed and that people want/expect options on their terms. To deliver and grow globally, Chapek said the company is focused on keeping its evolving distribution channels well stocked with content offerings that will “sort of” keep everyone happy. Disney is staying laser focused on its moneymaking M&E business while Warner/Discovery is struggling to return to the business it helped establish. There are still a number of opportunities for shift and consolidation in the industry. Traditional TV networks are still struggling to second-guess themselves on what flavor of entertainment people will agree to, on which day and what lead-in/follow-up shows will keep viewers connected. With the rapid growth on anytime, anywhere VOD viewing, industry players like Lionsgate, AMC Networks, ViacomCBS (Paramount +), NBCUniversal (Peacock) and (despite rigorous denial) even Sony appear to be likely targets for acquisition or merger to develop the mass needed to compete in the changing environment. Can’t wait to see what ViacomCBS becomes after Sheri Redstone rolled the management dice because Paramount + needs lots of great content and there’s not enough in her purse for great theatrical movies and great streaming content to entice mobs of subscribers. And the U.S. is one corner of the M&E industry that has an estimated 600 streaming service options which also have to compete with 2,000 plus services around the globe. While Netflix has an impressive 210M global subscribers, Disney+ 110M and Amazon Prime 200M; there is still plenty of room for content-rich providers to grow globally. The largest providers in China – now the world’s leading content production/consumer – Tencent (500M+) and iqiyi (480M+) have rapidly grown in SEA.