John Landgraf is predicting that consolidation among the major Hollywood studios is “inevitable” as they look to compete with Netflix and big tech players like Apple, Amazon and YouTube.
“We have an industry that, from a structural standpoint, requires some consolidation. We can’t have as many streaming services, certainly not global streaming services, and some of the great legacy majors in the United States don’t really have enough scale,” the FX chairman said during an interview at the Royal Television Society’s Cambridge Convention on Thursday. “I think that’s why you see — between Paramount, Universal and Warner Bros. — a desire to consolidate at least two of those companies to try to create another distributor that has a scale globally.”
“I really honestly think it’s inevitable,” he added. “If you look at the balance sheet for half of these companies independently, they really don’t have any way of scaling to 200, 250, 300 million global subscribers without some kind of consolidation.”
Landgraf emphasized that consolidation would be “really hard” for the creative community, noting that it means “greater efficiency” and “essentially, there’ll be one less buyer.”
He also said FX is changing its commissioning strategy as Disney pursues global growth. He noted how “Shōgun” is attracting more viewers outside of the United States and would be a template for some of the series he looks for going forward.
“I have to make a few things that really work globally,” he said. “We’re really trying to reposition as much capital as we can outside the United States to try to get better.”
The executive’s comments come as Paramount is reportedly preparing a majority cash bid for Warner Bros. Discovery, fresh off of closing an $8 billion merger with David Ellison’s Skydance Media in August.
It also comes as YouTube has dominated TV viewing in Nielsen’s monthly Gauge reports, accounting for 13.1% of streaming’s 46.4% share in August. In comparison, Disney+, Hulu and ESPN+ accounted for an aggregate 4.6% for the month.
“The thing I would say about content on the Internet is that it doesn’t have a lot of subtext; it’s all text,” Landgraf argued. “The best storytelling has layer upon layer of deeper meaning.”
