Jason Kilar has had a long career in entertainment, previously acting as the Founding CEO of Hulu and later a SVP at Amazon and then CEO of WarnerMedia, he's seen it all. After the merger of WarnerMedia and Discovery his time at WB came to an end and ever since he's been a free agent. In a new editorial that he wrote for The Wall Street Journal however, Kilar turned his expertise toward the future and offered a series of predictions about what the entrainment landscape could look like in the future, and they're pretty dramatic...though still plausible.
First, Kilar predicts that considering the thresholds required for streaming services to maintain profitability, and factoring in the interest by consumers in having subscriptions, he believes that "no more than three global entertainment companies are likely to attain the streaming-service scale required." According to Kilar, that requirement is a baseline of "300 million global subscriptions at an average of $15 per month," something that currently no streamer actually has. Netflix is currently the most with over 223 million, followed by Disney+ with 164 milion, and then 94.9 million subscribers combined between Warner Bros. Discovery's HBO Max and Discovery+ (which will soon merge).
Assuming that this is the case, Kilar then predicts that within the next two years, "two or three major mergers and/or acquisitions involving entertainment companies" will occur. This isn't too far-fetched anyway considering Disney acquired Fox, AT&T acquired Warner Bros., and then Discovery acquired Warner Bros. all within the past six years. Media companies selling themselves off for high price points is more attractive than ever, especially when Disney was able to pick up the likes of Marvel and Lucasfilm for $4 billion each over a decade ago.
Kilar believes that with these potential mergers on the table, meaning mega-sized streaming platforms, "streaming cash flows of the leading companies will eventually be north of $10 billion a year," a pretty unfathomable number for streamers right now. It's not all about streaming however as Kilar also notes that digital platforms by the same companies will also become huge profit generators, calling them "authentic digital relationships with customers" that could be big in the future.
A handful of other predictions that Kilar offers include sports and theatrical exhibition of feature films. The former WarnerMedia CEO beleives that sports leagues will eventually insist on "on dual distribution of each game across the cable bundle and streaming," something that will no doubt be attractive to consumers but could very well lead to even more cable cord cutting. As far as movies, Kilar believes that "a movie's exclusive theatrical window" could become "based on consumer demand," suggesting that "a movie's exclusive run in U.S. theaters would remain in place for as long as its weekly box office stayed above $5 million."
Assuming that this comes to pass, which companies do you think might get bought out by others? Could rumors of Apple buying Disney come to fruition? Will Netflix team up with another studio? Sound off with your best guesses below.
(Cover photo by Thomas Trutschel/Photothek via Getty Images)