It doesn't matter who buys Warner Bros., streaming video is going the way of streaming music

Until the news of Netflix buying Warner Bros. broke, the streaming video wars had largely become a stalemate over the last few years. Each of the seven (or more) direct-to-consumer services either had a compelling back catalog of shows and movies or the resources to create new originals to stay relevant. It was starting to feel like the crowded landscape of streaming music services, in their heyday.

But with the sale of Warner Bros. and HBO content, the logjam is breaking, and consolidation has begun. It doesn’t even matter who ends up with WB, whether it’s Netflix or Paramount Skydance with its hostile bid. The total financial amount isn't straightforward anyway. In the end, it seems like we’re officially on our way to having only two or three major streaming services, just like we do in streaming music.

Consolidation seems inevitable

With mobile, the choice is Apple or Google—an iPhone or an Android phone. For music streaming, it’s Spotify, Apple Music, and maybe YouTube Music. This kind of consolidation happens all the time. People’s appetite for choice is usually limited to a couple of major options, with a few other boutique choices always around or popping up for niche audiences.

How many people now subscribe to multiple streaming music services? I wonder if we aren’t headed for a very similar fate on the streaming video side.

At one point, streaming music services differentiated their products based on artist exclusives and song availability. If you wanted to listen to Jay Z’s and Beyoncé’s newest albums, you had to subscribe to Tidal. There was an extended period of time when Taylor Swift’s music wasn’t available on Spotify.

People were switching services more readily, while the more invested music fans subscribed to multiple services. That seems similar to today’s video streaming services.

The music industry is set up very differently from Hollywood. But Netflix already licenses HBO shows from Warner Bros. Discovery. Streaming originals have already made their way to free ad-supported services like Tubi and Pluto. Could there be a time in the future when most older movies and TV shows are available non-exclusively on a couple of major streaming services?

Is there a future world where 75% of TV shows and movies are the same on each of the streaming services? It seems unlikely at the moment, but never say never.

The final three

If Spotify, Apple Music, and YouTube Music are the main music services. Then what will the main three be for video? Based on the current landscape, my guess is Netflix, Disney, and Paramount.

Netflix is already huge. It has the flywheel in place to bring in enough money to license and create original content, both of which then bring in more people. Up until recently, it seemed like Netflix was just going to brute force its way to a catalog of content bigger and better than any other company. Now, with the offer to buy Warner Bros., it seems like it still needs well-known, established franchises and characters.

For Disney, it’s Hulu and ESPN that are its tentacles to grab people who aren’t interested in traditional Disney content. While Disney+ and Hulu may not be fully convincing, the addition of ESPN’s games from the NFL, MLB, NBA, and NHL makes the full bundle of all three compelling for a lot of households. Sports, for better or worse, is a proven driver of subscriptions and retention.

As for Paramount Skydance, I think most people would have written off Paramount+ before 2025, but the parent company has shown an aggressive appetite for consuming media companies. It wants to be a major player in Hollywood when the dust settles. A big reason it made a hostile bid for Warner Bros.

As for the others. Apple TV and Amazon Prime Video will probably continue to hum along as boutique services until they stop being important to their respective companies. Both have different business models to fund content. The content serves other business units within those companies.

NBC with Peacock is the last remaining wild card. Even with sports on Sunday night, Olympics coverage, and select originals, can it manage to compete against the other bigger services?

Right now, Apple TV and Peacock have a newly created bundle. You can subscribe to both for a discounted rate. If Apple were to acquire Peacock and NBC Universal’s intellectual properties, the scales would drastically change. But it also wouldn’t surprise me to see it be bought by another one of these companies.

Major changes are coming in the streaming video wars. Likely, more content ownership will change hands in the near future. But when there are only a couple left, and the landscape looks more like the streaming music one, my question is whether we’ll still feel the need to subscribe to all video services, or if one will cover most of our viewing needs.