Many years ago, during the maturing of the video industry, smaller video store chains consolidated to form behemoths such as the Blockbuster and Hollywood (later Movie Gallery) video chains. These big chains were able to garner more favorable terms from the studios on the titles they bought on VHS and, later, disc. Blockbuster, at one point, even had a content acquisition arm that picked up films for distribution in Blockbuster stores.
Now, I’m experiencing a bit of déjà vu in the digital arena. Phone behemoth AT&T is looking to acquire DirecTV, giving them access to more screens on which entertainment can be consumed. That comes on the heels of the announcement of a prospective deal between the Comcast and Time Warner cable companies. Meanwhile, Netflix is both lamenting the end of strict net neutrality — the FCC’s program making a level delivery field for online programming — and is making exclusive deals to make sure its content gets better treatment at the services that deliver it. Like Blockbuster, Netflix is also embarking on owning the content it delivers: “House of Cards,” “Orange Is the New Black,” etc.
I guess this is the digital business maturing, consolidating and jockeying for advantage in a developing digital world. But it also seems that what’s old is new again. The players and the format (digital) are different but the process seems similar. The content delivery players are trying to bulk up and gain advantages over their competitors, while also dabbling in the content ownership realm dominated by the studios that supply them with content.
And that’s why I’m getting déjà vu. What’s old is new again, as companies try to dominate the entertainment delivery highway. Blockbuster or Netflix, Hollywood —which at one time owned Reel.com, one of the first entrants in the digital realm — or Amazon Prime, the competitors change but the essential business is similar. And, judging by the past, we are in the era of consolidation.