What streaming service is that show on?
It's a question that has begun to dog consumers in the modern streaming age. It's also one that could eventually become a lot simpler if media mergers heat up.
AT&T's announcement on Monday that it had struck a deal to spin off WarnerMedia, the owner of HBO, CNN, TNT and several other major media businesses, and combine it with Discovery, a sizable media operation in its own right with Food Network, HGTV, the Oprah Winfrey Network, Travel Channel and others, became one of the first major media mergers of the streaming age.
It combines two streaming operations that were sizable but still small compared to the likes of Netflix and Disney. The move hints at what analysts and media industry experts say is a move toward consolidation.
The expectation is for more mergers and acquisitions soon.
"It's going to put pressure on everyone else," Craig Moffett, of the research company MoffettNathanson, said of the AT&T deal on Yahoo Finance Live. "Netflix knew they were going to have to compete against some big players. And clearly that means Discovery will be one of those big players. Amazon, I think, just by virtue of who they are was going to be one of those big players."
Some talks were already underway. In recent weeks, Amazon has been in talks to acquire MGM, the movie studio behind the James Bond and Rocky franchises, according to a person familiar with the negotiations. Technology industry publication The Information first reported the talks. A deal would give Amazon more than 4,000 film titles and 17,000 television episodes to add to its streaming library. Apple and Comcast have also eyed MGM, two sources said.
The emergence of the streaming industry quickly gave rise to dozens of companies looking to offer services ranging from niche interests like anime and horror movies to bundles from major media companies such as NBCUniversal's Peacock or ViacomCBS' Paramount+. NBCUniversal is the parent company of NBC News.
And while the pick-and-choose nature of the businesses offered consumers some upside when compared to the all-or-nothing cable bundle, it had already become a chore to figure out how to watch a particular show — and whether it was something worth paying for month after month.
It's an issue that may in part be fixed by the need for streaming services to be bigger — both in terms of the libraries of content they hold but also the amount of money they can spend on new content.
"I think everybody is concluding that to play in this streaming business is really hard and really expensive," said Paul Hardart, a professor of marketing at New York University and the director of its entertainment, media and technology program. "And you need scale, and I think you will start to see more of these companies combining to see that scale because it's a very, very expensive game."
That volume of offerings could offer some advantages to consumers, much as the cable bundle once offered upside for being a one-stop shop, albeit an expensive one.
Rajkumar Venkatesan, a professor of business administration at the University of Virginia, who focuses on analytics, said the consolidation is part of a natural cycle. Streaming platforms offered an unbundled experience that could deliver on-demand content in a better way than cable packages. But now that those experiences are becoming commoditized, they're starting to rebundle.
Along the way, some media companies once seen as major players — NBC and CBS among them — can no longer rely on their size.
"These are big brands in the old world but they are smaller than Netflix and Disney in the new world," Venkatesan said.
That means even a sizable media operation like Comcast's NBCUniversal could be in need of more content. Media analysts have speculated that Comcast could look to pull a maneuver similar to AT&T’s by combining NBCUniversal with another large media company.
"The big questions now are (1) Why did Comcast not take a shot at trying to merge NBCU with WarnerMedia? and (2) Will Comcast follow AT&T’s lead and spin-off NBCU and merge with another media company?" wrote the technology, media and telecommunications research firm LightShed Partners in a blog post following the announcement of the Discovery deal. LightShed has aggressively advocated for media consolidation to compete with Netflix and Disney.
A spokesperson for Comcast declined to comment. NBCUniversal did not immediately respond to requests for comment.
For consumers, that means the fractured streaming experience could become more streamlined. And with more content, companies will operate with more user data, which Venkatesan said could mean better automated recommendations and targeted content creation. He also suggested a few major players will have to compete on price to retain customers.
But that's not a foregone conclusion, and there are already indications that the U.S. government will take a close look at the WarnerMedia deal to make sure it is good for consumers. Critics of consolidation have argued that prices for consumers have steadily risen because larger companies have less competition.
Sen. Richard Blumenthal, D-Conn., tweeted Monday afternoon that the deal "demands close scrutiny to protect consumers' pocket books instead of accelerating further concentration among corporate behemoths."
"Recent lax antitrust enforcement has allowed a dramatic consolidation in the media market that is driving up prices & limiting consumer choice," Blumenthal added. "TV viewers & sports lovers deserve more choices about how they get their entertainment, better competition over services & lower prices."
Some in the entertainment industry have said that consolidation is changing the work that is made. Writing in The New York Times in 2019, director Martin Scorsese offered a warning.
"The situation, sadly, is that we now have two separate fields: There’s worldwide audiovisual entertainment, and there’s cinema," he wrote. "They still overlap from time to time, but that’s becoming increasingly rare. And I fear that the financial dominance of one is being used to marginalize and even belittle the existence of the other."