The world of movie studios is a bumpy one at the moment, with all sorts of deals bubbling away as the big names consolidate.
Disney, of course, is leading the charge here, with its big money offer for 21st Century Fox, that would include its film and TV assets. A spanner has been thrown in the works there though with Comcast attempting to hijack Fox’s own bid to fully take over Sky TV. If Comcast prevails, it’s feasible that Disney’s interest with Fox may dwindle.
Separately, Lionsgate has all but declared itself open to potential offers. Both Warner Bros and Sony have been rumoured to be considering the future of their own respective film businesses in recent times too.
Now, a Wall Street entertainment analyst – Laura Martin, from Needham & Company – has voiced what many have been thinking, in suggesting that in five years’ time, rather than there being seven major film studios, there’s feasibly going to be just three, “because they have to save margins and merging is the best way to do that”.
This is all in response to the threat posted by companies such as Netflix, Amazon and Apple TV, who are spending heavily on productions. Amounts that big studios are struggling to match.
Martin says of the big tech companies now circling Hollywood that “they will spend three to five years wasting tens of billions of dollars – which we on Wall Street will give them at almost no cost – and then they’ll figure out this is really hard. They don’t know how to manage content and they don’t know how to tell stories”.
Whether this all comes to pass remains to be seen. But it does at the very least feel feasible in the current environment.
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