Hollywood's Great Streaming Overhaul Is Just Beginning

The television industry has been bombarded with curveballs this year, from programming cancellations, delays and ad revenue evaporation prompted by Covid-19 to the acceleration of changing consumer habits. Now add another seismic shift to the list: an unprecedented changing of the guard in the upper echelons of television’s biggest companies. Within the last three months, Disney, NBCUniversal, ViacomCBS and WarnerMedia have all overhauled and restructured their organizations to position streaming at the center of their businesses. Even streaming native Netflix, which has had a better-than-expected year, has seen changes at the top of its television programming unit amid a streamlining that will put a larger focus on global programming. The reasoning is simple. Companies are streamlining their sometimes labyrinthine organizations to better weather the new business reality of streaming, the importance of which has been made clear with back-to-back debuts of new services. As a ripple effect of those new products and an unavoidable effect of the continued consolidation of media, the overhauls happening in media’s highest ranks reflect the inevitability of change as companies look to cut costs, unify across ever-broadening portfolios and keep customers and advertisers satisfied. “The signal is clear that streaming is clearly the path forward,” said Jason Kanefsky, chief investment officer at Havas Media. “As revenue continues to erode from traditional advertising and affiliate fees diminish as cord-cutting accelerates, streaming—whether it be on an owned platform or a pay-to-play platform—is the not-so-distant future.” The most recent instance of an overhaul was at ViacomCBS, where executives elevated Pluto TV CEO Tom Ryan last week to lead the company’s collection of free and paid streaming services. That elevation also led to the eventual exit of longtime digital officer Marc DeBevoise, who had overseen CBS All Access’ growth from a nascent streamer to one that housed high-profile originals like The Good Fight and Star Trek: Picard. That move, of course, came less than two years after Viacom acquired Pluto TV and less than a year after Viacom and CBS’ own merger. A week before that, Disney—now helmed by newly minted CEO Bob Chapek—brought the company’s distribution and commercialization arms, including ad sales and streamers like Disney+, under a single media and entertainment distribution group headed by Disney consumer products and publishing veteran Kareem Daniel. Those fall upheavals were preceded by considerable summer reorganizations. In August, WarnerMedia, headed by new CEO Jason Kilar, executed a wide-ranging overhaul that saw the departures of longtime chairman Bob Greenblatt and content chief Kevin Reilly. It also gave expanded roles to HBO programming president Casey Bloys and Otter CEO Tony Goncalves. In the same week as WarnerMedia’s restructuring, NBCUniversal had its own overhaul. This saw the departure of NBC Entertainment chairman Paul Telegdy, an elevated role for Peacock chairman Matt Strauss and a unification of its entertainment segment. TV companies have made their focus on streaming loud and clear since they raced to build all-purpose streamers to account for consumer shifts to over-the-top and on-demand viewing. And in the wake of massive acquisitions, they're also looking to cut costs. ViacomCBS CEO Bob Bakish promised that hundreds of millions in “cost synergies” were coming following the ViacomCBS merger. AT&T also laid out a three-year plan to reach $1.5 billion cost synergies following its 2018 acquisition of Time Warner (now WarnerMedia). Disney, which acquired Fox in March 2019 and has since moved to rearrange Hulu and Fox assets to fit within its own portfolio (and prompted its own executive shuffles), saw similar changes. “Naturally there are going to be a lot of changes internally, even at the top, because you have all of these organizations condensing,” said Dan Rayburn, a principal analyst at Frost & Sullivan and the conference chairman of the NAB Show Streaming Summit. “I can’t remember another time in the industry dating back 25 years where we’ve had this much consolidation so quickly.” While change is constant—“you constantly have to restructure your business based on market dynamics,” Rayburn said—the tectonic leadership shift is an indicator of the fast-paced nature of the industry. Of the 12 streaming television executives quoted in Adweek’s deep-dive in May about the race to build the perfect streaming service, seven of those executives have changed positions, left their companies or are in the process of exiting. “These are all pretty much necessary shifts that are happening that reflect changing consumer behavior,” said Jed Meyer, managing director, North America of independent media and marketing consultancy Ebiquity. “The way content is being distributed now and in the future is going to continue to change and evolve, and their businesses have to evolve as well.” As reorganizations happen, media companies are promising advertisers unity and simplicity when it comes to planning, buying and partnerships. NBCUniversal has perhaps been most vocal with its plans to build a one-stop-shop across its platforms, but it's happening everywhere as teams of all kinds become integrated. For companies known for managing their processes effectively, keeping that reputation requires a unification of workflows, tech stacks and other under-the-hood processes. As those projects continue, expect even more shifts. “Because these companies have so many different content offerings, verticals and use cases, they have to have them in some sort of holistic platform—and that’ll take years,” Rayburn said. “There will definitely be more synergies across all of these companies, and we’re definitely going to see some much deeper technical integrations.” As those changes continue, media companies must also grapple with retaining the institutional knowledge and long-standing rapport some departing executives may have with partners. In the increasingly cutthroat media business, deals can be contingent on the power of those relationships, Meyer said, which poses a risk. “The question every company has to balance when you’re trying to figure out what the future looks like is: how do you retain some of that domain knowledge, some of that institutional knowledge, while also making sure that you’re able to be agile enough to pivot to whatever the new normal is in terms of the consumer landscape, the advertiser landscape, the sales landscape?” Meyer said. “And the jury’s out on that in terms of what the future looks like.”