AT&T announced last week that it would spin off Time Warner. This comes after purchasing the company just three years ago for 85 billion dollars.
The company also spent a considerable amount in legal fees fighting the Department of Justice, which sought to stop the deal. As part of the new deal, AT&T will spin off its media assets, with WarnerMedia and Discovery combining forces, becoming a new entity with bolstered content. Of course, the deal will have to be approved by regulators first. When it becomes official, AT&T will take on some debt while also receiving a payment of 43 billion dollars in cash.
In 2007, Netflix began streaming movies on its platform. It created deals with different companies to offer a wide variety of content. It would take some time, but other streaming services would eventually pop up and begin offering similar services. With companies vying for movies and TV series, it became clear that streaming would become the future, and content would become the king.
Netflix’s competitors have grown over the past few years, with the most notable being Amazon and newcomer Disney. There are also fledgling services like Peacock and HBO’s newly minted Max offerings that have yet to attract many paying subscribers.
So, what does all of this mean for the future?
Firstly, there is more competition in the market. While this is a good thing, it also means that content will be further divided. If the content is spread across multiple platforms, customers will be forced to make decisions.
While this competition could make things difficult for streaming services, it typically doesn’t lead to drops in pricing. For example, Netflix has steadily increased its pricing for the past decade, stating that it is spending more on content. Although it is relatively new, Disney has also done the same, increasing its price from just a year ago.
In the end, streaming services will keep trying to make new content or acquire it. Since content is the most important in the streaming world, the future will be a world with exclusive offerings from each service. The customers are the ones on the losing end being forced to spend more money by joining multiple platforms or only sticking with one streaming service. Either way, sacrifices will have to be made on the consumer side.
