Opinion: What Will Be The Next Big Streaming Industry Acquisition?

Monday’s news of the $43 billion merger between AT&T Inc. T and Discovery Communications Inc. DISCA and Tuesday’s news of reported efforts by Amazon.com, Inc AMZN to make a $9 billion acquisition of the MGM movie studio and its film library could signal the dawning of a new age of consolidation in the streaming industry.

Two obvious questions that arise from the developments: Who will be the next company being pursued for acquisition, and which company will be writing the checks with multiple zeroes for the purchase?

Here are some potential targets and predators to follow.

Potential Acquisitions In streaming, content is a never-ending concern. MGM’s library encompasses 4,000 films and 17,000 hours of television, including perennial favorites such as the James Bond and Rocky films. For Amazon, whose library is only eight years old, this creates a content bonanza.

The new entity created by the AT&T-Discovery merger will not be lacking content, while Walt Disney Co.’s DIS acquisitions prior to the November 2019 launch of Disney+ — including ESPN, 20th Century Studios, Pixar, Marvel Studios, Lucasfilm and Jim Henson’s Muppet Company — could with its own extensive library ensures its viewers will not be lacking choices.

Thus, potential acquisition targets could be content-rich companies including AMC Networks Inc. AMCX, which built its streaming presence over the last half-dozen years through acquisitions and investments in smaller niche services, including the British programming-focused Acorn TV and BritBox, the horror film service Shudder, the Black culture-focused Allblk and indie film favorites IFC Films and Sundance Now.

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The Criterion Channel, the streaming service of the privately-owned DVD and Blu-ray label The Criterion Collection, offers more than 2,000 titles ranging from landmark classics to quirky independent and international titles.

Although The Criterion Collection’s high-end product has a devoted following among cinephiles, DVD and Blu-ray sales were falling prior to the COVID-19 pandemic and were eclipsed by streaming during the past year. In view of the continued decline of physical media for the home entertainment sector, it is not unimaginable that the company would agree to consider a merger or even a full-blown acquisition.

And then, there’s Curiositystream Inc. CURI, which specializes in educational content for younger viewers. Compared to its rivals, CuriosityStream has been under the proverbial radar: the company recorded $9.9 million in Q1 revenue, a 33% year-over-year rise but much lower than the 70% year-over-year revenue spike from the previous quarter.

Streaming services seeking to beef up their children’s programming might easily want to run due diligence on CuriosityStream’s potential.

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Potential Acquirers The most obvious streaming service with a ravenous appetite for content is Netflix NFLX, which recently closed a deal worth $450 million to create two sequels to the popular 2019 film “Knives Out” and signed a pact with Sony Corp’s SONY subsidiary Sony Pictures for exclusive U.S. rights to Sony’s theatrical releases during the Pay One period between a cinema release and a DVD/Blu-ray premiere.

But Netflix lacks the legacy library that the new AT&T-Discovery, Disney+ and Comcast Corporation's CMCSA Peacock offer, and the company could quickly load up on content via a well-targeted takeover.

Likewise, Apple Inc.’s AAPL Apple TV+, which is trailing the competition in subscribers and program quantity, could benefit from an infusion of thousands of new films and television episodes that an acquisition could generate.

And for those willing to bet on a longshot, keep an eye on China’s Baidu Inc BIDU, which slid into the streaming world last November by acquiring JOYY Inc.'s domestic video-based entertainment live streaming business in China for $3.6 billion in cash.

Whether Baidu would pursue a direct acquisition or team with a U.S. company on a new joint venture could be debated, but the U.S. market is too delicious not to attract attention from beyond our borders.

(Illustration by FrankundFrei / Pixabay.)