View of Sun Valley Lodge in Sun Valley, Idaho.
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Media and tech titans will convene in Sun Valley this week to lay the groundwork for the future of streaming — and potential alliances.
Allen & Co.’s annual conference, often referred to as a “billionaire summer camp,” begins at an Idaho ski resort on Tuesday. The conference, which has been held since 1983, has been the birthplace of major media deals and the place where industry leaders discuss the future of their businesses, as well as the overall economy.
The Sun Valley Invitational List According to reports includes old media leaders like Warner Bros. Discovery’s David Zaslav? by Disney Bob Iger and potential successors Dana Walden, Alan Bergman, Josh D’Amaro and Hugh Johnston. as Netflix co-CEOs Ted Sarandos and Greg Peters; along with tech titans like of Amazon Andy Jassy and Jeff Bezos. and apple CEO Tim Cook. While these heavy hitters are frequent attendees at the conference, they are not guaranteed to be present this year.
Shari Redstone, a regular attendee, is also on the guest list. Its participation in the conference will come after National Amusements, its controlling shareholder Paramount Globalagreed to merge the media company with Skydance after months of negotiations.
Talk of the dramatic deal process will likely circulate throughout the talks. But more importantly, Sun Valley can also be a key backdrop for advancing deal talks. The Skydance deal includes a 45-day “go-shop” clause, meaning potential bidders still have time to submit their bids.
On a larger scale, the Paramount deal will serve as the backdrop to the larger debate about the streaming business and how to make it profitable. In years past, media companies chased high subscriber numbers in an effort to one-up each other. But this time the focus will be on how to get together to make the tricky business of streaming work.
“Hands down, the one really important issue here is how these companies make global TV streaming work for everyone,” said Neil Begley, an analyst at Moody’s Investors Services. “It will either be the more aggressive use of bundling services or the formation of joint ventures or mergers.”
Flow alliances
Shari Redstone, president 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 leading the so-called streaming wars, with 269.6 million members worldwide, many other streaming players believe there is room for combinations to keep up.
Media mogul Barry Diller — who also did a path to takeover Paramount — said the industry should ditch Netflix and focus on broadcast and pay-TV businesses that remain profitable.
Executives from the future Paramount property said on an investor call Monday that it plans to explore partnerships or packages with other streaming players. Former NBCUniversal CEO Jeff Shell, who is set to become Paramount’s next chairman, said Monday that he sees bundles and joint ventures as the future of the streaming business.
Paramount’s current leadership is also in active discussions with other media and technology companies about merging Paramount+ with another streaming platform, CNBC previously reported.
“I personally think that eventually the world of streaming will look a lot like that [pay-TV] the world looked like it used to,” Shell said on Monday’s call, adding that the consortium of investors buying Paramount has received calls interested in potential streaming partnerships.
Shell believes there will eventually be a “one stop shop” with all streaming apps for consumers. “If you’re in that pack, you’re going to win. And if you’re not in that pack, you’re in real trouble,” he said.
Picture Alliance | Picture Alliance | Getty Images
Mergers or joint ventures are one way. Bundling services together is a second way, and some media companies have made progress on this front.
While Disney bundles its own streaming services — Disney+, Hulu and ESPN+ — it also partners with other companies.
Disney and Warner Bros. Discovery plans to offer a package that will be a combination of Max, Disney+ and Hulu, launching this summer. The two companies are also merging Fox Corp. to offer a sports streaming service expected to launch in the fall.
“There’s going to be real alliances and there’s going to be a need because 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 investments. “Everybody understood that and they’ve made quite a few pieces so far.”
The idea, in general, is to get users in the door and watch their shows and movies, even at a discounted price. According to Begley, Sun Valley should discuss raising streaming prices to premium levels and pushing consumers toward ad-supported options to maximize ad revenue.
“I think Sun Valley is going to be more focused on, ‘What are we doing?’ All these different media companies that used to be the deep pockets and controlled Hollywood, and now they’re not the kingpins that they were,” said Mark Boidman, head of media and entertainment investment banking at Solomon Partners.
Athletic Center
Dwyane Wade spent 16 years playing in the NBA.
Nathaniel S. Butler | National Basketball Federation | Getty Images
With NBA media rights negotiations still ongoing, sports will remain a topic of discussion at this year’s gathering.
League commissioners, especially the NFL’s Roger Goodell, are often present at the Sun Valley convention. In the past year streaming and technology players have claimed an even bigger share of the space traditionally held by legacy companies.
The NFL has signed 11-year media rights deals worth more than $100 billion, and the league has shown it believes streaming is an integral part of 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 will begin showing NFL games on Christmas Day.
Current NBA rights holder Warner Bros. Discovery is considering whether to match a competing bid for the media rights as the league tries to wrap up smaller packages. The league is close to signing deals with Disney, NBCUniversal and Amazon, CNBC previously reported mentionted.
“Another big issue [at Sun Valley] it’s how deep we go in sports,” Miller said. “It’s pretty clear that the NBA is the last deal of its kind for traditional players. Eight to 10 years from now, they won’t be able to compete.”
Sports remains the glue that holds the traditional pay TV package together and has proven invaluable to streaming services as well. Live television, especially sports, and to some extent news, have attracted the highest ratings.
“With no other sports rights on the table for quite some time, the next time those rights come up it’s very likely that Amazon and Netflix will play a much bigger role,” Begley said. “Linear TV business is declining and we are far from seeing gains with streaming; we will likely see the end of legacy media’s dominance of sports rights.”
Political debate
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 | News Getty Images | Getty Images
Sun Valley also includes politicians, economists and leaders from US universities among its standard list of participants.
In that vein, the upcoming election is likely to “dominate a lot of conversation” in Sun Valley this week, Miller said.
Some business leaders have been waiting on the outcome of the upcoming election before pursuing big deals, feeling that the current regulatory environment and high interest rates have put cold water on deal-making.
And more immediately, the policy debate is likely to center on whether President Joe Biden will, or should, remain the Democratic Party nominee after his disastrous debate performance last month.
In recent days top party donors have been call for Biden to resign.
A growing group of these dissenting voices and sponsors includes media heavyweights such as dealer, Endeavor Group HoldingsAri Emanuel, Netflix co-founder Reed Hastings and screenwriter Damon Lindelof — all say they believe Biden should step down to allow a new candidate to take his place. Former Disney Studios president Jeffrey Katzenberg was allegedly silent on whether his longtime support for Biden has changed.
Meanwhile, Disney heiress Abigail Disney said she will withhold funding for the Democratic Party until she ditches Biden.
The president defended his mental health in a recent interview and has repeatedly said he has no plans to drop out.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
Correction: This article has been updated to correct that former Disney Studios president Jeffrey Katzenberg allegedly silent on whether his longtime support for President Joe Biden has changed. An earlier version did not misstate Katzenberg’s position.
