Business Evolution in TV Sector Gains Momentum by 2024
In the third quarter of 2024, the media industry witnessed a series of significant developments.
Warner Bros. Discovery (WBD) reported an 8% increase in sales for its Direct-to-Consumer (DTC) segment, indicating a growing appetite for streaming services. However, WBD's linear networks saw a decline of 5% Year-on-Year (YoY), highlighting the gradual shift towards digital platforms. WBD's DTC efforts generated flat revenue growth to $7.662 billion through the first nine months of 2024.
Streaming platforms continued to dominate the landscape, accounting for 41% of American TV consumption in September 2024. YouTube, in particular, claimed 10.6% of all living room viewing, underscoring its increasing influence.
Disney's streaming operation delivered a $321 million profit from July to September 2024, while Netflix reported a 15% increase in third-quarter revenue to $9.825 billion and an all-time high in free cash flow in Q3 of $2.194 billion.
The talent-guild strikes of summer 2023 caused a major content pipeline disruption in 2024, affecting Paramount Global's revenue. However, Paramount Global saw a 10% sales increase in Q3 from direct-to-consumer streaming platforms including Paramount+.
Cord-cutting might be slowing down a little, as the three biggest publicly traded pay TV operators reported declines in Q3 in the number of subscribers quitting their services. Charter, for instance, will deliver $80 a month of SVOD services to subscribers of its most popular video tier at no additional cost in 2025.
In the realm of live sports, the entry of Amazon, Apple, and Netflix into the market threatens to further erode media company linear networks. Notably, Amazon will take over the NBA rights for WBD's TNT starting in 2025.
The M&A landscape is also evolving. DirecTV and Dish Network announced a renewed effort to join forces in 2024, but negotiations ended due to disagreements over Dish's significant debt load. Alaska's biggest cable operator, GCI, announced plans to shut down its pay TV operation in mid-2025 and offer customers the Xumo streaming platform instead.
With Republicans sweeping into federal power, M&A possibilities in the video business are numerous. Veteran federal regulator Brendan Carr was appointed to head up the FCC by the new administration, and there's a belief among media titans that the federal government will shift to a laissez-faire stature on media company dealmaking. The name of the U.S. government chief expected to establish a new regulatory environment for the media sector after the Republican victory in November 2025 is Donald Trump, who won the 2024 U.S. presidential election and began his second term in 2025.
As we move forward, it will be interesting to see how these trends and developments shape the media landscape in the coming years. The rise of streaming, the impact of live sports on the industry, and the potential for M&A are just a few of the factors that will undoubtedly continue to influence the media industry in the future.
