Prepare For A Whole Bunch Of Pointless, Harmful Mergers In Streaming By Media Executives All Out Of Original Ideas
Early last year, streaming company Fubo filed an antitrust lawsuit against Disney, Fox, and Warner Brothers Discovery after the three companies decided to launch their own joint streaming live sports venture. Fubo, in the lawsuit, claims the collective power of the three companies would stifle competition in the sports streaming space, ultimately driving up costs for consumers and lowering product quality.
“Each of these companies has consistently engaged in anticompetitive practices that aim to monopolize the market, stifle any form of competition, create higher pricing for subscribers, and cheat consumers from deserved choice,” Fubo CEO David Gandler said last year.
In August Fubo won an injunction, but that was then and this is now.
This week, Disney settled the allegations in the most American of ways: additional corporate consolidation. The company has announced it’s taken a 70% ownership stake in Fubo, which immediately proceeded to drop its antitrust lawsuit. When Ars reached out to Fubo TV, the company’s logic had taken a mysterious 180 thanks to the giant bag of money received from Disney:
“The definitive agreement that Fubo signed with Disney today will actually bring more choice to the market. As part of the deal, Fubo extended carriage agreements with Disney and also Fox, enabling Fubo to create a new Sports and Broadcast service and other genre-based content packages.”
So Fubo execs got a big bag of money, and they’ll be fine over the short term. Until the consolidated power of Disney, Fox, and Warner Bros Discovery uses their consolidated leverage to ultimately drive them out of the market in a few years, precisely as Fubo originally predicted. At which point these executives will have moved on to something else anyway.
I warned about all of this just about a year ago. Now that streaming subscriber growth has slowed, media giants are struggling to deliver Wall Street their sweet, unrealistic, bottomless quarterly growth. Since it’s impossible to add any more huge blocks of subscribers, they’ve taken to annoying existing consumers with weird restrictions (see: the password sharing crackdowns) and price hikes to goose revenues.
But the primary way they’ll please Wall Street is via more pointless and destructive mergers like the disastrous Time Warner, Discovery, AT&T kerfuffle. Major deals that temporarily goose stock valuations and drive massive tax cuts, but ultimately result in endless layoffs, price hikes, less overall competition, and lower quality product. The trajectory isn’t subtle.
Media executives like Warner Bros Discovery’s fail-upward brunchlord CEO David Zaslav are all but drooling at the prospect of unlimited merger mania under Trump 2.0. You’ll recall that Trump’s “antitrust enforcers” during his first term routinely rubber stamped massive, competition-eroding deals without even bothering to read studies on their potential impact.
And when Trump “antitrust enforcers” did act, it was usually out of petty vengeance, like when Trump’s DOJ (sloppily) sued to stop the AT&T Time Warner merger because Fox News boss Rupert Murdoch didn’t want the deal to succeed. When Trump “antitrust enforcers” act during Trump 2.0, it’s going to usually be as retribution against companies that don’t adequately coddle authoritarian power. Mob shit.
Ultimately this pointless consolidation in streaming will serve nobody but higher level executives and some investors. Consumers and workers are usually the ones that pay the price for the higher debt loads and distraction caused by pointless consolidation. They’ll respond by flocking to free options and piracy, and execs will, starting later this year, begin blaming everyone but themselves for the migrations.
There’s no end to this cycle because there’s no financial or regulatory repercussion in the U.S. for the corporate pursuit of mindless, purposeless, and clearly harmful consolidation. We pay empty lip service to “antitrust reform” and healthy markets, but when a progressive regulator actually tries to follow through and protect diverse competition, greedy men the country over cry like toddlers who skipped their mid-day nap, scaring federal regulators right back into fecklessness.