Part One: Consolidation or, how I learned to Stop Worrying and Love Cartels

Note: This post and this blog in general are meant to be enjoyed by industry outsiders aka I know I'm oversimplifying things. But when discussing #MEDIA with my nonIndustry friends I find myself reiterating basic points. So! Let's get oversimplifyin'!

And let's kick this summerblog off, eh? Yes yes I know it like just turned Spring a few days ago but today is Major League Baseball's Opening Day or it would've been because reasons so for all intents and purposes let's just say it's summer. Corndog me, yo.

I wanted to begin this blog with a chart that I think about often. Apologies to recode for the minor edits I made for clarity. And even with my edits, it's still kind of out of date but it's accurate enough to get the basic points across.

Disney buys Fox: And then There were Five.

But that chart has so much text! Well I say it's time for a quick explanation and some bullet points, y'all.
The entertainment industry of the 21st century is easily compared to the railroad industry of the 19th century when viewed through the light of vertical and horizontal integration in the race for monopolies. The general flow of television content (once production wraps and studio licensing settles; this isn't a development blog, guys) is a (1) studio produces the content, it sells the content to a (2) channel, who in turn sells that channel to a (3) distributor, who then sells a group of channels to the consumer. Let's get to know our personae dramatis, shall we?

• Major Studios
• Warner Bros
• Universal
• Disney
• Viacom Paramount
• Sony Pictures
• Major Channel Groups
• Turner / HBO / CW*
• NBC
• ABC
• CBS
• Discovery
• Major Distributors
• at&t / DirecTV
• Comcast
• Spectrum Charter
• Cox
• Dish TV
• Altice
• Verizon
• Sprint / T-Mobile (pending!)

The quickest way to save money is to begin cutting out as many middle-men as possible. The first round of this has already happened. Warner Bros has control of Turner / HBO and functional control of the CW. Universal has NBC. Disney controls ABC. Viacom Paramount shares ownership with CBS (and just finished their official merge). Leaving only Sony Pictures without a major channel group. And leaving Discovery Communication the only major channel group without studio ownership.

Essentially, now there exist only five mega-merged companies with the rights to decades-deep libraries of unending bingeable content that can be accessed for (essentially) free.

The second round of middle-man cutting is ongoing. Comcast struck first by acquiring NBCUniversal. And the merged at&t / DirecTV now owns Warner Bros. But! in 2010 along came a wrinkle:

The distribution model was completely up-ended. With the success of Netflix, Hulu, and Amazon Prime proven over the course of the 2010s, studios are now rushing to provide Direct-to-Consumer offerings, cutting out all distribution middle-men. Why sell content cheaply-ish to Netflix and then have Netflix rake in all those sweet subscription dollars?

It is no wonder that the three studios without distribution ownership launched their Direct to Consumer platforms first: Sony's Crackle, CBS's All Access, and Disney's Disney+ & (purchase of) Hulu. Warner Bros' HBOMax and NBC's Peacock are soon to follow.

As of now, these studios (with the exception of Sony who sold Crackle in 2019) have the option to produce content, pay no middle-men, and pass the savings onto you!***
*For Now.
**Forever questionmark.gif

So who gets left out in the cold in this brave new world? Distributors without decades of that sweet bingeable studio content (Spectrum, Cox, Dish, Verizon, Sprint / T-Mobile and digital distributors Netflix and Amazon). Some have money to save themselves. Some... may not?

Enter a new round of eat or be eaten.

While Disney does not have distribution ownership, it acted quickly and purchased former studio Fox. With their powers combined and as it stands now, it is "safe" by its sheer market size alone. Its library will remain its own.

CBS / Viacom Paramount and Sony Pictures are the two studios that have deep libraries and cheap price tags. Distribution platforms like Verizon, Sprint / T-Mobile, Spectrum, Netflix, and Amazon have big wallets and a need for content. New players like Google, Facebook, and most notably Apple have made serious moves about entering the media content space. If they plan on launching or retaining a streaming service, they need those years of content.

THAT'S THE 40,000 FOOT OVERVIEW, FOLX.
Future posts will touch upon:

• What This Means for YOU Billy EveryTeen, the Consumer!
• Local Franchise TV Ownership: What You Don't Know About Your Local Stations' Ownership and How That Relates To Everything Above
• Intellectual Property aka Why Content is Important aka Why These Mergers and Acquisitions Happened in the First Place
• Internet Distribution: Video on Demand vs Streaming e.g. CBS All Access vs Pluto TV
• And gosh so, so much more. BINDERS OF MORE.