Maybe the empire can strike back. Or at least strike anew.
Over the past few months, a number of developments have emerged for traditional media companies that indicate a spirit of reinvention and experimentation is spreading across the industry. There’s a new willingness to take a hard look at long-standing operations and make big and sometimes surprising changes.
This goes deeper than the headline-generating M&A deals that are measured in tens of billions of dollars. Of late there have been some granular-level moves that signal a push to revise the business blueprint for a new era of streaming and linear competition on steroids.
Who could have predicted that Sony Pictures Television would part with a clutch of Asian TV channels in a sale to the executives who previously ran those channels, Sony alums Andy Kaplan and George Chien? Or that Warner Bros., with all its volume and market clout, would set up a joint home entertainment distribution venture with Universal to serve North America?
Fox Corp. is acknowledging the migration of younger viewers to mobile streaming platforms in assembling the Fox Soul ad-supported streaming platform that launched with only a little fanfare on Jan. 13. It’s a means of grabbing eyeballs for locally produced and syndicated content that already has a linear home on Fox’s local TV stations.
Nexstar Media Group is proving to the broadcast industry that it has plans to capitalize on the nearly national reach of its newly enlarged station group. Plans for the “News Nation” primetime newscast coming to Nexstar’s WGN America cable channel this summer is a bigger swing — and far more effective leveraging of the company’s 197 TV stations — than airing low-cost Canadian and U.K. dramas, as the cabler does at present.
In designing the “News Nation” plan, Nexstar chairman-CEO Perry Sook told an industry crowd at the NATPE conference in Miami last week that it started with a simple question after the Tribune deal was finally in the bag: “What’s the highest and best use of those assets?”
The production of local news is a primary focus for most of Nexstar’s stations, so it doesn’t take a huge leap to build out a national-desk operation at WGN America that will be supported by the 5,400 journalists that Nexstar employs in its newsrooms. Better still, Nexstar will own all of “News Nation” and its complementary app outright. Sook said he’s known since he began the march to build Nexstar that stations need to own programming, not just rent. It was clear even in the mid-1990s that outlets that served only as “video jukeboxes were going to be relatively expendable,” he said.
That’s no doubt why CEOs et al., are looking under the hood for more than just a tuneup of operations these days. There’s an urgency for established media giants to rethink how and why resources are deployed, even in sectors that still deliver big profits. The exemplar here is Disney chairman-CEO Bob Iger’s wholesale realignment of the company to support the dawn of Disney Plus. At NATPE, there was feverish speculation among industryites that Disney will soon report upwards of 25 million subscribers for Disney Plus, less than two months after its Nov. 12 launch.
Iger’s willingness to withstand short-term hits to revenue and profits in order to build a bridge to the future with Disney Plus, Hulu and other streaming assets has drawn universal praise from his industry cohorts. Disney’s ability to assuage Wall Street and engage consumers has provided a ray of hope for traditional Hollywood after a long period of gloominess over the fact that Netflix was suddenly and seemingly out of nowhere the undisputed cool kid on the block.
Disney’s boldness seems to be having a kind of ripple effect on companies with less formidable assets and balance sheets. Long may Baby Yoda help guide Hollywood through the fog of the streaming wars.
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