The Media and Content Consolidation Countdown – Industry Voices: Grebb

The media industry has lived through an eclectic period, thriving during the pandemic even as it overproduced content and then surviving dual Hollywood strikes that halted productions last year. These days, it’s just trying to figure out where to go from here. And that’s an open question. 

Most media executives acknowledge a shift away from quantity and toward curation, as well as more focus on maximizing revenue rather than hoarding intellectual property within streaming services. But as those strategies unfold, content companies have yet to prove that they understand how to execute that vision. After all, striking the right balance between offering enough content to keep consumers from churning out while fully capitalizing on every monetizable chunk of IP remains elusive. It’s perhaps the key challenge of this new media era, undergirded by a growing desire to boost average revenue per user through now ubiquitous ad-supported tiers amid a soft advertising market that probably will remain sluggish throughout 2024. 

The Hollywood creative community has always struggled to navigate the changing studio winds. But media executives seem more determined than ever to consolidate. That of course includes traditional M&A that likely will see Skydance Media/Redbird Capital Partners, Warner Bros. Discovery, a Silicon Valley streamer, or any number of other potentials snapping up Paramount Global this year. One or two other major deals could also surface in 2024, with Lionsgate finally separating from Starz and dangling its attractive portfolio in front of Hollywood’s hungry eyes.

But it’s about more than corporate mergers. The new obsession with consolidation affects all things, including content production, as industry strategists work toward a more efficient system that uses everything from sophisticated market research to granular streaming data to artificial intelligence to make more hits, create more value, and ultimately produce more profits. While some have famously predicted for years that peak TV was upon us only to eat crow as content volume kept rising, the last couple of years suggest that the peak has finally arrived. 

According to One Touch Intelligence’s StreamTRAK® video intelligence service, the amount of total content produced by audited AVOD, broadcast, cable, premium, and SVOD platforms declined precipitously if you compare the last six months of 2023 to the same period of 2022. SVOD services, for example, churned out nearly 650 unique TV series premieres from July to December 2022 but only about 540 in the second half of 2023, a 17% decline in volume. AVOD services went from about 30 premieres to 25, a 19% decline. But linear platforms experienced the most dramatic falloff, with broadcast premieres down 24%, standard cable premieres down 28%, and premium cable premieres off by 29%. Taken all together, linear and streaming platforms went from nearly 1,200 TV premieres in the second half of 2022 to fewer than 900 in the same period of 2023.

To be sure, the Hollywood strikes played a role as many planned productions either ended up deferred to 2024 or shuttered altogether. But don’t bet that 2024 will bring us into positive territory, as studio and streaming executives have consistently told investors they will either cut or hold the line of programming expenses. That generally means fewer productions and TV premieres. Can we bank that the lower volume will translate to higher levels of storytelling? Perhaps an equally dangerous bet. Short of a massive sea change, studios and streamers will produce less content going forward. Even Netflix, which might be the only streamer left willing to throw everything against the wall in search of a hit, has scaled back a bit as part of the new reality. But in 2024, that’s a given. As noted above, the real question is where we go from here. 

It’s especially interesting to ponder the future of content (quality vs. quality and all) as we hit the 25th anniversary of the premiere of HBO’s The Sopranos, which by some measures kicked off the Golden Age of TV that led to a quality spike over the last two decades. Despite the recently stated desire of industry leaders to make fewer but better shows, The Sopranos creator David Chase just told the U.K. Times that he thinks “we’re going back to where we were” before his masterpiece and a few other key shows of that era kicked quality up a notch. 

Of course, whether that’s really true depends on who you ask. It’s certainly the case that pushing more eyeballs to ad tiers makes pitching R-rated series like The Sopranos much harder as creative executives increasingly favor content with crossover appeal between ad free and ad-supported streaming options. A show that pushes the envelope on sex or violence might work on the ad free platform but face problems attracting advertisers within an ad tier. That lowers the potential long-term value, both on native platforms and as an asset cued up for licensing to other companies.

While 2024 could be a banner year for consolidation of the corporate variety, it’s also likely to produce a general “consolidation mindset” that leads not only to less content but also content that’s multi-purpose, whether that’s attracting streaming subs, pleasing advertisers, or fueling IP licensing opportunities. As creators search for that unicorn idea that works on all levels (and therefore produces the most revenue), it’s possible that edgier, riskier fare will fall by the wayside - a fate made worse by the tendency to greenlight fewer shows as content producers search for that perfect balance. Quantity and quality don’t always play nicely, no matter how much you mash them together in search of balance.

Michael Grebb is Senior Vice President and Lead Analyst for One Touch Intelligence, which provides market intelligence and industry analysis services for leading companies in the media and telecommunications space. The One Touch Intelligence StreamTRAK series is a complimentary service offering industry professionals insights and context around developments in the digital media sphere.

Industry Voices are opinion columns written by outside contributors — often industry experts or analysts — who are invited to the conversation by StreamTV Insider staff. They do not necessarily represent the opinions of StreamTV Insider.