The entertainment industry, battered and bruised from the trials of 2024, enters 2025 with a mix of anticipation and apprehension. The return of Donald Trump to the presidency promises a loosening of regulatory constraints, potentially sparking a flurry of mergers and acquisitions. However, several factors may temper this deal-making frenzy. Major players like Warner Bros. Discovery grapple with substantial debt, while Comcast faces tax implications related to its SpinCo venture. Leadership transitions at Disney and Fox, coupled with Paramount’s ongoing merger with Skydance, further complicate the landscape. Even deep-pocketed tech giants like Netflix, Amazon, Apple, and Alphabet may find more compelling investment opportunities elsewhere. Despite these hurdles, the divestiture of CNN by Warner Bros. Discovery and the potential consolidation of cable operations remain likely scenarios.
The rise of artificial intelligence, symbolized by ChatGPT’s displacement of Max in app download rankings, casts a long shadow over the industry. This underscores a larger trend: the diminishing centrality of Hollywood content, particularly for younger demographics, in the face of competition from e-commerce giants like Shein and Temu. This shift in attention spans and consumption habits poses a significant challenge for traditional media companies. Meanwhile, YouTube continues its ascendancy as the most-watched streaming service, further solidifying its dominance with high-quality programming that captivates viewers. Roku, with its vast user base and lucrative ad-supported channel, emerges as a prime acquisition target for companies seeking to leverage audience data and advertising opportunities. This shift toward online advertising spells trouble for traditional broadcasters and cable networks, who rely heavily on the Upfronts for ad revenue.
The fate of TikTok hangs in the balance, with looming legislation threatening its operation in the U.S. While national security concerns persist, Trump’s newfound appreciation for TikTok’s political utility and its competitive challenge to Meta’s platforms might influence the outcome. Whether through legal maneuvers or strategic negotiations with China, TikTok’s survival in the U.S. seems probable. Traditional news organizations face a harsh reality of dwindling revenues and declining viewership. Salary cuts for on-air talent, spin-offs of cable news networks, and escalating legal battles initiated by Trump contribute to a challenging environment. In contrast, niche news outlets, particularly on the conservative side, thrive by leveraging digital platforms and catering to fragmented audiences.
The gaming industry continues to flex its financial muscle, with the anticipated release of Grand Theft Auto VI poised to become the year’s biggest entertainment event. Projected to generate billions in revenue, GTA VI exemplifies the gaming industry’s increasing dominance over traditional Hollywood productions. Meanwhile, the theatrical exhibition business remains in a precarious state. Despite blockbuster sequels, box office revenues continue to lag behind pre-pandemic levels, raising questions about the long-term viability of the traditional moviegoing experience. The shift towards streaming and the efficacy of expensive theatrical releases in capturing cultural attention in a fragmented media landscape are increasingly debated.
Netflix doubles down on live streaming, leveraging its successful foray into live NFL games and Beyoncé’s halftime performance to expand its live content offerings. The debut of WWE Raw on Netflix, with its global reach and family-friendly programming, marks a significant step in this direction. Other sports properties with global ambitions, such as UFC, are likely to follow suit. Amazon, too, will expand its live event presence, capitalizing on its new NBA/WNBA deal. The launch of ESPN The App, offering a comprehensive streaming experience with all of ESPN’s premium sports rights, signals a major shift in sports consumption. While the proposed sports-focused skinny bundle Venu faces legal hurdles and a shrinking window of opportunity, the availability of ESPN via streaming accelerates cord-cutting, further eroding the cable television subscriber base.
Women’s sports continue their upward trajectory, building upon the momentum generated by the WNBA’s record-breaking year and the growing prominence of college stars. Increased media attention, lucrative contracts, and the expanding reach of social media and streaming platforms contribute to the rising popularity of women’s basketball. This growth extends beyond basketball, with the NWSL attracting high-profile investors and benefiting from Netflix’s acquisition of FIFA World Cup rights. Other women’s sports, including gymnastics, snowboarding, soccer, softball, volleyball, and skateboarding, also stand to gain from increased visibility and the emergence of tech-savvy athletes.
