2025 Changed the Media Business. Next Year Could Be Even More Turbulent.

Warner Bros. has entered into an agreement to be acquired by Netflix for $27.75 a share. (Jill Connelly/Bloomberg)

Key Points

• The media industry has been changing as consumers switch from TV to streaming.
• Mergers and acquisitions are one way companies have responded as they try to adapt. Corporate breakups are another response.
• Streaming companies are adding new content, particularly live sports, as they try to win subscribers.

The curtain is about to close on a transformative year for the media business—and media stocks. From the battle between Netflix and Paramount Skydance for Warner Bros. Discovery to the breakup of Comcast, the landscape will look much different next year than it did at the start of 2025.

The industry has been evolving for years as consumers switch from traditional TV to streaming platforms. According to research firm Nielsen, streaming represented nearly 47% of TV watch-time in November, beating the combined total for cable, at almost 21%, and broadcast, at about 23%.

Some of the biggest changes are happening now. Enormous merger deals, company spin offs, and efforts to bring in new types of content to streaming platforms will determine what the industry looks like in the new year.

The Fight for Warner Bros. Discovery

The biggest media news in 2025 has come at the end of the year, as companies battle for ownership of Warner Bros. Discovery.

Netflix said on Dec. 5 that it agreed to buy Warner Bros.’ studio and streaming businesses for $27.75 a share, or about $72 billion. Netflix will also assume nearly $11 billion in debt and intends to borrow around $50 billion to fund the cash portion of the acquisition.

Some shareholders are concerned about the hefty price tag, but Netflix has its reasons for wanting to expand.

“We believe this very expensive deal highlights NFLX management’s concern that short form entertainment (TikTok, Insta, X, YouTube shorts and Snap) is doing to streaming what streaming has done to traditional TV,” Pivotal Research Group analyst Jeffrey Wlodarczak wrote on Dec. 8.

Paramount Skydance wants Warner Bros. too. The company made a rival all-cash offer of $30 a share for all of Warner Bros.

“What Paramount needs is scale,” Gimme Credit analyst Dave Novosel told Barron’s. “They’re never going to be the size of a Netflix, a Prime Video, a Disney, on their own.”

Paramount CEO David Ellison is also the son of billionaire Larry Ellison. Paramount said on Dec. 22 that the elder man will provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer and any damages claims against the company as it continues fighting for Warner Bros.

Paramount has argued to Warner Bros. shareholders that its offer is superior to Netflix’s. Warner Bros. has pushed back, urging shareholders to reject Paramount’s offer.

Paramount believes it will have an easier time getting antitrust approval than Netflix would, due to Netflix’s existing streaming strength. The senior Ellison is also a friend of President Donald Trump.

The Ellison family has also had a positive outcome with the government before. The Federal Communications Commission approved a merger of Paramount and Skydance Media on July 24.

Wall Street is watching closely to see how this all plays out. Netflix needs shareholder and regulatory approval to get Warner Bros., which won’t be easy. If that happens, Novosel says, Paramount will have to look for other potential acquisition targets to compete with larger entertainment companies.

Company Breakups

At the same time, media companies are changing from the inside out.

In June, before Netflix made its move, Warner Bros. said that it was separating into two publicly listed companies. One would be home to its movie studios and HBO Max, while the other would include the cable channels. Netflix’s bid for the company covers everything but the cable networks, including TNT and Discovery, which will be spun off as a separate company called Discovery Global.

“That to me is still not going to be an attractive situation given the outlook for linear operations,” Novosel said.

Paramount’s offer consists of all of Warner Bros., including the cable channels.

Comcast is also going through a breakup. It said in November 2024 that it would be spinning off its portfolio of NBCUniversal’s cable television networks into a new publicly traded company. Stock in that business, Versant Media Group, is expected to start regular trading on Jan. 5.

“While management continues to believe that pay-TV will remain important for many years to come (mainly driven by live sports and news), they also want to stress that the company is not ‘stuck’ in the old cable and media world but one that is actively exploring ways to expand its audience,” BNP Paribas analyst Sam McHugh wrote on Dec. 5.

Evolving Tech and Content

Companies have flocked to the streaming business as traditional TV has declined, so attracting new viewers is hard. Exciting, new, and unique content is the key.

The content on all streamer’s minds right now is sports because pro games remain one of the few types of programming they haven’t wrested from traditional TV. Investors should expect media companies to continue spending big in hopes of filling that gap.

Some have already made strides. Walt Disney just launched a new ESPN streaming platform, Netflix is hosting NFL Christmas games, and the MLB’s 2026 Opening Night. Amazon Prime Video and Peacock stream weekly football games.

“It’s a business that you can still do advertising, because advertisers will pay for sporting events, and it’s still showing growth,” Novosel said.

Other live events outside of sports are also in high demand. The Oscars will be moving to YouTube from Disney’s ABC in 2029.

Artificial intelligence is another front in the same battle. Media companies are seeking to implement it into their own platforms as an additional attraction.

Disney and OpenAI said on Dec. 11 that they reached a three-year licensing agreement where Sora, OpenAI’s generative-AI video app, will be able to add Disney characters into user-generated videos. A selection of these fan-made videos will become available to stream on Disney+.

“I think this is a pretty strong signal from a leader in the market of what they are deciding and sort of the best in the most productive course of action for them,” Evan Schlossman, principal at SuRo Capital, told Barron’s. “And so you certainly could see other players attempt similar transactions.”

SuRo Capital is an investor in OpenAI.

Write to Angela Palumbo at angela.palumbo@dowjones.com