A view of Sun Valley Lodge in Sun Valley, Idaho.
Drew Ungerer | Getty Images
This week, media and tech giants are gathering in Sun Valley to lay the groundwork for the future of streaming — and future partnerships.
The Allen & Company annual conference, also known as “summer camp for billionaires,” kicks off at an Idaho ski lodge on Tuesday. Since 1983, the conference has been the birthplace of big media deals and a forum for industry leaders to discuss the future of their own companies and the economy as a whole.
Sun Valley Invitation List Reportedly Legacy Media Leaders, etc. Warner Bros. Discovery David Zaslav Disney Bob Iger and his potential successors Dana Walden, Alan Bergman, Josh D’Amaro, Hugh Johnston, and Netflix Co-CEOs Ted Sarandos and Greg Peters, along with tech giants Amazon Andy Jassy and Jeff Bezos apple CEO Tim Cook. These big names frequently attend the conference, but it’s unclear if they’ll be there this year.
Regular attendee Shari Redstone is also on the guest list, making her attendance at the meeting second only to National Amusements’ controlling shareholder. Paramount Globalhas agreed to merge its media company with Skydance after months of negotiations.
Talk of a dramatic deal process will likely come up often in conversations. But more importantly, Sun Valley could be a key location for navigating deal talks. The Skydance deal includes a 45-day “go-shop” clause, meaning potential bidders still have time to submit bids.
More broadly, the Paramount deal will be the backdrop for a broader discussion about streaming and how to monetize it. In the past few years, media companies have been chasing subscriber growth to compete with each other, but this time the focus will be on how to work together to succeed in this tricky business.
“Arguably, the real question here is how these companies make streaming TV work for everyone around the world,” said Neil Begley, an analyst at Moody’s Investors Service. “They’ll either leverage bundled services more aggressively, form joint ventures or merge.”
Streaming Alliance
Paramount Global Chairman Shari Redstone attends the Allen & Company Media and Technology Conference on Tuesday, July 11, 2023 in Sun Valley, Idaho.
David A. Grogan | CNBC
Netflix has 269.6 million subscribers worldwide and leads the so-called streaming wars, but many other streaming operators see room to merge in order to catch up.
Media mogul Barry Diller The TV CEO who made the move to buy Paramount says the industry needs to give up chasing Netflix and focus on its broadcast and pay-TV businesses, which continue to generate profits.
Executives for Paramount’s next owner said in an investor call on Monday that they plan to explore partnerships and bundling with other streaming providers. Former NBCUniversal CEO Jeff Shell, who is set to become Paramount’s next president, said Monday that he sees bundling and joint ventures as the future of the streaming business.
CNBC previously reported that Paramount’s current management is also in active discussions with other media and technology companies about merging Paramount+ with another streaming platform.
“Personally, I think the streaming world is going to end up [pay-TV] “The world has moved on,” Shell said on a conference call on Monday, adding that the investor consortium buying Paramount is receiving calls of interest about a potential streaming partnership.
Shell believes that eventually there will be a “one-stop shop” of all streaming apps for consumers. “If you’re in that bundle, you’ll win. And if you’re not in that bundle, you’re really in trouble,” he said.
Picture Alliance | Picture Alliance | Getty Images
Mergers and joint ventures are one way, bundling services is a second, and some media companies are moving in that direction.
Disney bundles its own streaming services (Disney+, Hulu, ESPN+) but also partners with other companies.
Disney and Warner Bros. Discovery will offer a bundle combining Max, Disney+ and Hulu this summer. Fox Corporation The company will provide a sports streaming service scheduled to launch in the fall.
“The media industry as a whole is under such strain right now that traditional companies simply can’t cope on their own, so true partnerships will emerge and will be necessary,” said Jonathan Miller, CEO of digital media investment specialist Integrated Media. “They know this, and they’ve been hit hard enough by now.”
Broadly speaking, the idea is to lure users in to watch shows and movies, even at discounted prices. Begley said Sun Valley should discuss raising streaming fees for its premium tier and pushing consumers to the ad-supported option to maximize ad revenue.
“I think Sun Valley will be more focused on ‘what do we do?’ This once-well-funded, diversified media company that dominated Hollywood is no longer the kingmaker it once was,” said Mark Boydman, head of media and entertainment investment banking at Solomon Partners.
sports Center
Dwyane Wade played in the NBA for 16 years.
Nathaniel S. Butler | National Basketball Association | Getty Images
Sports is likely to remain a topic of discussion at this year’s gathering, as NBA media rights negotiations are still ongoing.
League commissioners, particularly the NFL’s Roger Goodell, are frequent attendees at the Sun Valley meetings. Over the past year, streaming and technology companies have increasingly taken a share of the space traditionally reserved for legacy players.
The NFL signed an 11-year media rights deal worth more than $100 billion, signaling that it sees streaming as essential to the league’s future. Amazon is the exclusive streamer of “Thursday Night Football,” and Google’s YouTube TV recently acquired the rights to “Sunday Ticket.” Netflix recently announced it will begin broadcasting NFL games on Christmas Day.
Warner Bros. Discovery, the NBA’s current rights holder, is considering whether to field competing offers for media rights as the league tries to put together smaller package deals. The league is close to reaching deals with Disney, NBCUniversal and Amazon. CNBC previously reported report.
Another major theme [at Sun Valley] “The question is, how deeply are we involved in sports,” Miller said. “It’s clear that the NBA is the last contract for traditional players. Eight to 10 years from now, they’re not going to be able to compete.”
Sports continues to act as the glue that holds the traditional pay-TV bundle together, and it’s also proving crucial for streaming services: Live TV, especially sports, and to some extent news, attracts some of the highest viewership.
“There haven’t been any sports rights negotiations for a while, but when they come up next, Amazon and Netflix are likely to play a bigger role,” Begley said. “Traditional TV is in decline and streaming has a long way to go before it becomes profitable. This could spell the end of traditional media dominance when it comes to sports rights.”
Talking politics
Former President Donald Trump, left, and President Joe Biden face off during the first debate of the 2024 presidential campaign, June 27, 2024, in Atlanta.
Andrew Harnick | Getty Images News | Getty Images
A typical Sun Valley attendee list also includes politicians, economists and leaders of U.S. universities.
In that sense, the upcoming election is likely to “dominate the conversation” in Sun Valley this week, Miller said.
Some business leaders feel the current regulatory environment and high interest rates are pouring cold water on dealmaking and are waiting for the results of the next election before moving forward with any big deals.
And in the more immediate future, political discussion is likely to focus on whether President Joe Biden will, or should, remain the Democratic nominee following his dismal performance in last month’s debate.
Recently, major political party donors call I hope Biden resigns.
Media heavyweights are among the groups voicing their opposition and donating like Diller, Endeavor Group HoldingsAri Emanuel, Netflix co-founder Reed Hastings and screenwriter Damon Lindelof have all said Biden should step aside and allow a new candidate to take his place. Former Disney Studios Chairman Jeffrey Katzenberg said: Reportedly silent On whether her longstanding support for Biden has changed.
Meanwhile, Disney heiress Abigail Disney has said she will withhold funding from Democrats until Biden withdraws.
The president has defended his mental state in recent interviews and repeatedly said he has no plans to withdraw from the election.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
Correction: This article was revised by former Disney Studios Chairman Jeffrey Katzenberg. Reportedly silent On whether his longstanding support for President Joe Biden has changed. An earlier version misstated Katzenberg’s position.