Where the Media Business Is Going Next: AI, Streaming and Mobile

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Welcome back to the “Media Front.”

For much of the past decade, Hollywood’s biggest media companies were chasing versions of the same goal: Build a streaming service, add subscribers and reach enough scale to compete with Netflix.

This week’s earnings season offered perhaps the clearest evidence yet that the industry has moved on.

Streaming isn’t going away. In fact, after years of significant losses, it’s finally becoming a profitable business for some of Hollywood’s biggest players. But streaming increasingly looks less like the strategy itself and more like one piece of much broader — and very different — plans for growth.

Disney is looking to connect streaming to its broader consumer ecosystem. Warner Bros. Discovery is making a huge bet on consolidation through its proposed merger with Paramount. Fox is doubling down on sports, news and streaming through Tubi and its planned Roku acquisition. Newly independent Versant is building direct-to-consumer businesses around its strongest brands. And News Corp is looking for new ways to monetize — and protect — the value of its journalism in the AI era.

They largely agree on what’s going wrong. Linear TV continues to decline. Audiences and ad dollars are fragmenting. Consumers have more entertainment choices than ever. And streaming, despite its recent progress toward profitability, hasn’t simply replaced the economics of the cable bundle.

What the industry no longer agrees on is what comes next.

That’s a big change from the first phase of the streaming wars. Disney, Warner Bros. Discovery, NBCUniversal and Paramount spent billions building subscription services as Netflix transformed how consumers watched television. Subscriber totals became a closely watched measure of success, and Wall Street rewarded companies that could promise enough streaming growth to offset deterioration elsewhere.

Now the strategies are starting to look a lot less alike.

Companies are building around what they believe gives them an edge, whether that’s a sprawling consumer ecosystem, greater scale, sports, established brands or valuable intellectual property.

The search isn’t limited to television. Publishers are looking outside traditional advertising and subscriptions for businesses built around the audiences they already have. AI is creating another potential market for journalism — provided publishers can convince technology companies that their content is worth paying for.

Streaming, meanwhile, isn’t disappearing from any of these strategies. It’s firmly established as a major distribution business and, increasingly, a profitable one.

It just didn’t produce a single replacement for the business model it disrupted.

The question now is which of these advantages actually translates into growth. Bigger isn’t necessarily better. Sports rights aren’t getting any cheaper. And launching a direct-to-consumer product is a lot easier than convincing consumers to pay for it.

There probably isn’t one answer. That’s what makes this next phase of the media business so different from the last one.

For years, the streaming wars pushed much of the industry toward the same destination. This week’s earnings showed companies starting to head in different directions.

Now we’ll find out which ones picked the right road. Read on for the rest of this week’s Media Front column, and to get this newsletter directly in your inbox on Sunday mornings, adjust your WrapPRO account settings here.

Scripps’ AI Revolution Comes With Fewer People

The revolution will be televised. It may just take far fewer people to produce it.

E.W. Scripps CEO Adam Symson used the word “revolution” during the company’s earnings call Friday to describe what’s happening inside the TV station group,

Scripps says it has eliminated 432 positions and 126 open roles since the start of the year as part of a broader overhaul expected to generate $100 million in annualized savings.

The company is leaning into AI, automation, new technology and the centralization of some roles as it rethinks how its local newsrooms operate. Symson told analysts the goal is to turn Scripps into a “technology-forward, AI-powered broadcast journalism company.”

Adam Symson/E.W. Scripps (Credit: Getty Images/E.W. Scripps)

“We are not wavering on our commitment to quality journalism,” Symson said.

That’s the bet: Scripps believes it can dramatically lower the cost of producing local news without diminishing the product.

It’s a particularly important test for a local TV business already under pressure from cord-cutting, changing viewing habits and a declining linear advertising market. Scripps still sees local news as central to its future, including through a new 24-hour streaming news model. It just intends to produce that news with a very different cost structure.

AI is only part of the transformation. Scripps is also automating and centralizing some functions and changing how news is produced and distributed.

The question is whether viewers will notice.

If Scripps can maintain the quality and local connection of its newscasts while taking $100 million in costs out of the business, other station groups facing many of the same pressures will be paying attention.

That makes Scripps more than another local TV layoff story. It’s becoming a real-world test of how much technology can change the economics of local news without changing the journalism itself.

Read my full piece: E.W. Scripps to Become an ‘AI-Powered Broadcast Journalism Company’ After Sweeping Layoffs

News Corp Isn’t Fighting AI. It’s Fighting Free AI

News Corp CEO Robert Thomson delivered one of the week’s more colorful earnings call warnings when he argued that artificial intelligence risks leaving users “drowning in a slimy sea of AI slop” without high-quality journalism and other professionally produced content.

But News Corp isn’t rejecting AI.

It has content relationships with OpenAI and Meta and says it is in advanced discussions with other companies. At the same time, News Corp is pursuing legal action against companies it accuses of using its content without permission.

The dividing line isn’t necessarily AI versus journalism. It’s whether AI companies pay for the journalism their products depend on.

That distinction matters well beyond News Corp.

Publishers are confronting a technology that could become a new distribution channel, a source of licensing revenue and a competitor for audiences that historically arrived at their websites through search — all at the same time.

News Corp is betting that high-quality journalism becomes more valuable, not less, as AI-generated information proliferates. AI companies, after all, still need reliable material to make their products useful and trustworthy.

Whether that turns into a durable new revenue stream remains an open question. Licensing deals are still developing, and the legal boundaries around the use of copyrighted material by AI companies are being fought out in court.

But News Corp’s position isn’t especially complicated.

It’s willing to do business with AI. It just doesn’t think AI companies should get journalism for free.

My full piece: News Corp CEO Warns of ‘Slimy Sea of AI Slop,’ Threatens More Lawsuits

Coming Tuesday: Why Media Companies Are Betting Bigger on Live Events

Media companies looking for growth beyond traditional advertising and subscriptions are increasingly turning to a business that’s decidedly offline: live events.

Publishers and networks are expanding their events businesses, while advertisers are putting more money behind experiences that can bring brands face-to-face with highly targeted audiences.

There’s more to the strategy than filling a room. A successful event can generate sponsorship revenue, deepen relationships with audiences and create video, social and editorial content that lives well beyond the event itself.

I’ve spent the past week talking with media executives and industry experts about what’s driving the push — and whether live events can become a meaningful business rather than simply an extension of the media brands producing them.

Look for my full story Tuesday on TheWrap.

WaxWord: David Ellison Has a CNN Problem to Solve

David Ellison is finally talking publicly about the issue hanging over Paramount’s proposed $110 billion acquisition of Warner Bros. Discovery: CNN.

Ellison wrote this week that the question is whether he can be trusted as a steward of the cable news network and said Paramount remains open to finding an out-of-court resolution to the legal challenge threatening the merger.

But Sharon Waxman reports that another complication remains inside Paramount: CBS News editor in chief Bari Weiss.

Sources tell WaxWord that no decision has been made about whether CNN and CBS News would ultimately be combined. But if they are, the expectation is that Weiss would not lead the combined operation.

That leaves Ellison with a larger problem than simply winning regulatory approval.

If news is ultimately key to getting Paramount-WBD across the finish line, he still has to determine what a combined news operation would look like — and who could credibly run it.

Sharon Waxman’s full column: David Ellison Is Ready to Talk About CNN to Get His Deal Done — but Bari Weiss Muddies the Case