Rapid Transformation Persists in TV Industry by 2024
In the ever-evolving world of media and entertainment, 2025 promises significant changes. Alaska's largest cable operator, GCI, announced plans to shut down its pay TV operation in mid-2025, replacing it with the Xumo streaming platform for its customers. This move is part of a broader trend towards streaming services, as traditional pay TV operators adapt to changing consumer preferences.
The year 2025 also marks the end of an era for WBD's TNT, as Amazon takes over the NBA rights, leaving WBD without the broadcasting rights for the NBA starting from next year. This shift is inferred from WBD's role in broadcasting basketball events like the EuroBasket 2025, along with some rights arrangements changes, but the explicit information about losing NBA rights was not found in the available data.
The talent-guild strikes in 2023 caused a major content pipeline disruption in 2024, affecting companies like Paramount Global. Despite the streaming success, traditional Hollywood giants like Paramount saw a 6% drop in third-quarter revenue due to the "hangover" of the 2023 strikes. However, Paramount Global reported a 10% sales increase in Q3 from direct-to-consumer streaming platforms, including Paramount+.
Netflix, another streaming giant, 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. YouTube, on the other hand, consumed 10.6% of all living room viewing of "television" in American homes in September 2024.
The streaming sector is not just attracting traditional media companies but also tech giants. Amazon, Apple, and Netflix are entering the live sports business, threatening to further erode media company linear networks.
The regulatory environment is also expected to change, with the Republican Party sweeping into federal power in 2024. Veteran federal regulator Brendan Carr was appointed to head up the FCC by the new administration, who has agreed with the pledge to slash regulations and go after Big Tech. This could potentially open up opportunities for M&A, as seen in the renewed effort by DirecTV and Dish Network to join forces through M&A in 2024, although internal talks ended without a merger.
Charter, another major player in the pay TV market, is offering SVOD services to subscribers of its most popular video tier, the $125-a-month Spectrum TV Select+, at no additional cost. Charter also signed pay TV carriage deals in 2024 with WBD, NBCUniversal, Paramount, and other media companies to bundle their SVOD services into pay TV packages.
Streaming accounted for 41% of American TV consumption in September 2024, up from previous years. 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.
Lastly, the younger generation, known as "Gen Alpha" (born between 2013 and 2024), spends 78% of their screen time watching video on social media. This trend underscores the importance of social media platforms in the future of media and entertainment.
As we move into 2025, the media and entertainment industry is poised for significant changes, with streaming services, tech giants, and regulatory changes shaping the future of this dynamic sector.
