A view of the Sun Valley Lodge in Sun Valley, Idaho.
Drew Angerer | Getty Images
Media and technology titans will convene in Sun Valley this week to lay the groundwork for the future of streaming — and for potential alliances.
Allen & Co.’s annual conference, often referred to as “summer camp for billionaires,” kicks off at a ski lodge in Idaho on Tuesday. The conference, which has been held since 1983, has been the birthplace of media megadeals and the venue for industry leaders to discuss the future of their businesses, as well as the overall economy.
The Sun Valley invite list reportedly includes legacy media leaders like Warner Bros. Discovery’s David Zaslav; Disney’s Bob Iger and his potential successors Dana Walden, Alan Bergman, Josh D’Amaro and Hugh Johnston; as well as Netflix co-CEOs Ted Sarandos and Greg Peters; along with tech titans like Amazon’s Andy Jassy and Jeff Bezos; and Apple CEO Tim Cook. While these heavy hitters are frequent attendees of the conference, it’s not certain they will be present this year.
Shari Redstone, a habitual attendee, is also on the guest list. Her participation at the conference will come after her National Amusements, the controlling shareholder of Paramount Global, agreed to merge the media company with Skydance after months of negotiations.
Talk of the dramatic deal process will likely circulate throughout conversations. But more important, Sun Valley may also be a key setting to advance deal discussions. The Skydance agreement includes a 45-day “go-shop” clause, meaning potential bidders still have time to make their offers.
On a broader scale, the Paramount deal will serve as the backdrop to the larger discussion about the business of streaming and how to make it profitable. In past years, media companies chased high subscriber numbers in an attempt to best each other. But this time the focus will be on how to come together to make the tricky business of streaming work.
“Hands down, the one really important topic here is how do these companies make the streaming of TV globally work for everyone,” said Neil Begley, an analyst at Moody’s Investors Services. “It’s either going to be the more aggressive use of bundling services or forming joint ventures, or mergers.”
Streaming alliances
Shari Redstone, chair of Paramount Global, attends the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on Tuesday, July 11, 2023.
David A. Grogan | CNBC
With Netflix in the lead of the so-called streaming wars, with 269.6 million members globally, many other streaming players believe there’s room for combinations to keep pace.
Media mogul Barry Diller — who also made a run at acquiring Paramount — has said the industry needs to give up on chasing Netflix and focus on the broadcast and pay-TV businesses that remain profitable.
Executives from Paramount’s future ownership said on a Monday investor call that it plans to explore partnerships or bundles with other streaming players. Former NBCUniversal CEO Jeff Shell, who is slated to become the next president of Paramount, said Monday he views bundles and joint ventures as the future of the streaming business.
Paramount’s current leadership has also been in active discussions with other media and tech companies about merging Paramount+ with another streaming platform, CNBC previously reported.
“I personally think eventually the streaming world is going to look very similar to the way the [pay-TV] world looked in the past,” said Shell on Monday’s call, adding the investor consortium that’s buying up Paramount has received interested calls on potential streaming partnerships.
Shell believes there will eventually be a “one-stop shop” with all streaming apps for consumers. “If you’re in that bundle, you’re going to win. And if you’re not in that bundle, you’re in real trouble,” he said.
Picture Alliance | Picture Alliance | Getty Images
Merging or establishing joint ventures is one route. Bundling services together is a second way, and some media companies have been moving on that front.
While Disney bundles its own streaming services — Disney+, Hulu and ESPN+ — it’s also teaming up with other companies.
Disney and Warner Bros. Discovery plan to offer a bundle that will be a mashup of Max, Disney+ and Hulu, launching this summer. The two companies are also joining Fox Corp. to offer a sports streaming service that’s expected to launch in the fall.
“There’s going to be real alliances, and a need for it, since media is now generally desperate enough that none of the traditional companies can do it alone,” said Jonathan Miller, chief executive of Integrated Media, which specializes in digital media investment. “They all realized this and have taken enough lumps by now.”
The idea, broadly, is to get users in the door and watching their shows and movies, even at a discounted price. According to Begley, Sun Valley should feature some discussion around raising streaming prices on premium tiers and pushing consumers toward ad-supported options to maximize advertising revenue.
“I think Sun Valley is going to focus more on ‘What do we do?’ It’s all these diverse media companies who used to be the deep pockets and control Hollywood, and now they’re no longer the kings they were,” said Mark Boidman, head of media and entertainment investment banking at Solomon Partners.
Sports center
Dwyane Wade spent 16 years playing in the NBA.
Nathaniel S. Butler | National Basketball Association | Getty Images
With the NBA’s media rights negotiations still ongoing, sports will remain a topic of conversation at this year’s gathering.
League commissioners, especially the NFL’s Roger Goodell, are often attendees of the Sun Valley conference. Over the past year streaming and tech players have claimed an even greater share of the space that’s traditionally been held by legacy companies.
The NFL signed 11-year media rights deals valued at over $100 billion, and the league has shown it believes streaming to be integral to its future. Amazon is the exclusive home of “Thursday Night Football,” while Google’s YouTube TV recently acquired the rights to “Sunday Ticket.” Recently, Netflix said it would begin airing NFL games on Christmas Day.
Incumbent NBA rights holder Warner Bros. Discovery has been weighing whether to match a competing offer for the media rights as the league looks to finalize smaller package deals. The league is close to signing agreements with Disney, NBCUniversal and Amazon, CNBC previously reported.
“Another big theme [at Sun Valley] is how deep are we going in sports,” said Miller. “It’s pretty clear the NBA is the last-of-its-kind deal for the traditional players. In eight to 10 years from now, they won’t be able to compete.”
Sports remain the glue holding the traditional pay-TV bundle together, and has proven invaluable for streaming services, too. Live TV, especially sports, and to an extent, news, has attracted the highest viewership.
“With no more sports rights on the table for quite some time, the next time these rights come up it’s highly likely Amazon and Netflix will play a much bigger role,” said Begley. “The linear TV business is declining and it’s a long way from seeing profits with streaming; we will likely see the end of legacy media’s dominance when it comes to sports rights.”
Politics talk
Former President Donald Trump, left, and President Joe Biden face off in the first debate of the 2024 presidential campaign, in Atlanta, June 27, 2024.
Andrew Harnik | Getty Images News | Getty Images
Sun Valley also counts politicians, economists and leadership from U.S. universities among its typical attendee list.
In that vein, the upcoming election is likely to “dominate a lot of the chatter” at Sun Valley this week, said Miller.
Some business leaders have been waiting on the outcome of the upcoming election before pursuing megadeals, feeling the current regulatory environment and high interest rates have thrown cold water on dealmaking.
And more imminently the conversation about politics is likely to focus on whether President Joe Biden will, or should, remain the Democratic Party’s candidate following his disastrous debate performance last month.
In recent days, top party donors have been calling for Biden to step down.
A growing group of those dissenting voices and donors includes media heavyweights such as Diller, Endeavor Group Holdings‘ Ari Emanuel, Netflix co-founder Reed Hastings and screenwriter Damon Lindelof, and former Disney Studios chairman Jeffrey Katzenberg — all saying they believe Biden should step aside to allow for a new candidate to take his place.
Meanwhile, Disney heiress Abigail Disney has said she would withhold funding for the Democratic Party until Biden drops out.
The president defended his mental health in a recent interview, and has repeatedly said he has no plans to drop out of the election.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
