TheGrill 2019: “I think that these tech companies, they’re getting closer and closer in our world and we need to co-exist with them,” Burns says
Speculation about the demise of cable bundles has been greatly exaggerated, according to Lionsgate’s Michael Burns.
The industry will just replace “cable” with “OTT.”
“The next round will be bundling of over-the-top services,” said Burns, the studio’s vice chairman who spoke at The Grill, TheWrap’s annual business and entertainment conference, on Wednesday. “That will be the usual partners — the ones that you would think of — but I think there are going to be a lot of new ones that you’re going to say, ‘Well, that makes a lot of sense. That could be bundled together with a Starz app or a Showtime or an HBO.’”
The traditional cable bundle has broken down, with many consumers opting for a cadre of streaming services in lieu of a TV subscription. But with Disney, Apple, WarnerMedia and NBCUniversal all launching their own direct-to-consumer offerings over the next year — to go along with the existing group of Netflix, Amazon and Hulu — consumers could have headaches trying to keep all their various subscriptions in order.
Burns says that will eventually turn streaming into something that closer resembles the current entertainment landscape. “I think that these tech companies, they’re getting closer and closer in our world and we need to co-exist with them.”
The M&A (mergers and acquisitions) panel, which was led by Whisper Advisors co-founder and partner Jason Rapp, also touched on what businesses should be looking for when deciding what companies to acquire. Burns’ Lionsgate notably acquired Starz in 2016 for $4.4 billion, and on the other side of the spectrum is Hello Sunshine, led by Reese Witherspoon.
Hello Sunshine has three shows in development for Apple TV+ — including “The Morning Show” that stars Witherspoon and Jennifer Aniston — and “Little Fires Everywhere” for Hulu. The company also puts out shows on Facebook Watch and Instagram’s IGTV, to go along with a slew of podcasts.
“We are in a very noisy landscape so part of our thesis was we want to build a relationship directly with consumers both through Hello Sunshine on social and then through Reese’s Book Club,” Hello Sunshine CEO Sarah Harden said. Even though they’ve produced shows for Facebook Watch, she remembered all too well what happened to media companies that put their entire fortunes in Mark Zuckerberg’s hands, only for the rug to be consistently pulled out from under them.
“We had a really noisy cycle five years ago where you had a lot of digital media companies fueled by Facebook growth and they built big infrastructure,” Harden said. “I saw a lot of slide decks with, ‘We got 50 bajillian views of this thing,’ but there was no money being made.”