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It was the decade that altered the very definition of “TV†— Noun: Netflix. Verb: to stream.
The industry’s struggle to adapt to the new terminology sparked a merger mania that has rapidly condensed the market for entertainment content and pay-TV services into the hands of a powerful few. Here’s a look at what the rise of Netflix Inc., the intrusiveness of Big Tech and a decade of dealmaking did to the media and entertainment landscape:
As viewers decided they didn’t need so many channels, the industry decided it didn’t need so many companies. Once-powerful corporations such as 21st Century Fox and Time Warner Cable were acquired by rivals better equipped to navigate the new age of streaming. Fox’s studios joining the Walt Disney Co. family probably came as the biggest shock, but Disney’s more meaningful acquisitions were of the Marvel and “Star Wars†franchises, giving it near-total domination of the big screen.
Of course, the big screen isn’t quite so big anymore: Netflix alone generates more revenue than the entire North American box office. Originally a DVD-by-mail service whose biggest competitor was the Blockbuster store, Netflix is now nearly as valuable as Comcast Corp. It has also lured some of Hollywood’s most sought-after directors and actors, while others have taken their movie-making talents to Apple Inc. and Amazon.com Inc. That’s as Lions Gate Entertainment Corp., the studio that produced “The Hunger Games,†is barely able to hang on to its independence. CBS and Viacom recently became ViacomCBS Inc., but they, too, may be industry prey. Discovery Inc. was able to corner the market for unscripted domestic and culinary programming by taking ownership of HGTV and the Food Network. But the mega-deal of the decade was AT&T Inc., a once prosaic phone company, swallowing Time Warner, the parent of HBO.
The so-called streaming wars didn’t begin on any particular date, but an important one was April 2, 2010. That was the day the Netflix app appeared on the Apple iPad. Within a few months it was in the iPhone app store and suddenly streaming could fit right in our pockets, traveling wherever we went. Not long before, Netflix had struck a fateful distribution agreement with the Starz premium cable channel, which held the rights to major movies months after they left theaters. Starz would later regret the arrangement, but for Netflix, it meant gaining backdoor access to thousands of films, including hits made by Disney. And just like that, a $9-a-month app became a viable and satisfying alternative to cable TV.
Few industries were maimed by technology these last 10 years more than media — print media absolutely, but also the entertainment giants, where the figures at stake were even larger.
For investors and consumers alike, it’s an uncertain road ahead. My cynical prediction: An already shrinking industry will get even smaller.
—Bloomberg