With the Netflix, Amazon, Hulu, Disney+, and Apple+ streamers launched and HBO Max, Peacock, and Quibi soon to be available, will there be consolidation or expansion in the industry? More competition is always better for the consumer as it provides choices from the competition between firms. There is also more innovation as firms must change and adapt to attract more consumers and market share. Some industry experts however believe that consolidation is inevitable.
We may see Apple+, Quibi, and Peacock have a hard time competing with the established players unless they can show strength in scale through their consolidation or in producing and/or distributing award-winning television shows and feature films. We may also see Amazon or Apple buy Sony or Netflix. We may also see Apple buy Disney or Netflix.
Other rumors have included Lionsgate, MGM, and Sony consolidating to create a larger studio as one or being purchased outright or individually. The fact remains that content is king, but it is also true that quality of content and scale of content matter. This is why consolidation from mergers has been so prevalent over the past few years.
There is also the point that too much consumer choice among streamers will cause customers to not only cut the cable cord, but cut out certain streamer subscriptions or not sign up at all from decision paralysis and cost-effectiveness. Too much choice leaves customers failing to choose. For example, a typical entertainment and media customer would not have two satellite packages or cable packages if one provided everything they needed or too many choices caused confusion.
Although streamers are different in that they are less expensive than their cable and satellite competition, having too many streamers brings customers back to the level of spending they cut cable and satellite for in the first place. Streamers would be wise to utilize analytics to know what their customers want and do not want and how to best deliver it. The larger and more profitable companies in the world like Apple and Amazon will have no problem buying up down-the-line competitors.
However, the smaller players will either have to innovate, be sold, or consolidate themselves to stay competitive. Maybe a mix of the aforementioned strategies will be implemented. Much like free agents being signed by another team, there is only so much time and opportunities before the created content is all sold and distributed.
One suggested thought is to add live and/or recorded sports to a streaming platform to innovate and keep consumers engaged with others signing up to do the same. Another thought is utilize analytics to make sure business-decisions are being made with both human knowledge from experience and data collected from their platforms. A final thought is whether streamers become like the cable channels of old providing content with the internet providers and larger distribution platforms like Amazon becoming the cable and satellite companies of old albeit with upgraded technology. Either way, the entertainment, media, and sports industries are ripe for change and that is likely to include significant consolidation in both acquisitions and strategy.