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Michael Lavine's avatar

nice tree photo!

Marc Schloss's avatar

If we zoom out Media companies are executing strategic acquisitions to secure foundational AI capabilities, talent (acquhires), and data libraries. The cost to build the necessary data centers and computing frameworks is so high that smaller players are compelled to merge to remain competitive.

With traditional cable TV (linear TV) viewership declining and streaming services facing saturation, media conglomerates are consolidating to form multi-platform bundles. Aggregating premium content under unified platforms and selling non-core assets are critical to reversing slowing revenue growth.

If you look strictly at traditional entertainment, the Paramount Global and Skydance Media merger—complemented by subsequent discussions involving Warner Bros. Discovery—proves the second half of the thesis.

Faced with severe subscription fatigue and declining legacy cable revenues, these legacy entities are consolidating to build massive, unified IP libraries. This scale gives them the necessary pricing power to survive, while pooling their resources to offset the massive capital costs required to build out modern digital and AI distribution architectures.

The purpose of corporations in a free market is to enhance shareholder value and in my opinion that is what CEO of media companies are attempting to do due to uncertainty to their legacy business model due to artificial intelligence. I agree consolidation is lamentable but unfortunately necessary.

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