Paramount Skydance‘s acquisition of Warner Bros. Discovery to form Skydance Corp., which pushes the combined company to second place in Nielsen’s U.S. TV audience share and brings together two major Hollywood studios, has reignited debate about consolidation in media. But the bigger story is what the merger highlights about the pressures reshaping the media industry and the race to reinvent a market where audiences are more fragmented, competition for attention is intensifying and technology is changing how content is created, distributed and monetized.
The most interesting thing about this acquisition isn’t merely the consolidation itself. It’s what companies do with the scale after they consolidate. Combining two companies can create scale, but scale alone doesn’t automatically create relevance — much less long-term survival. Media companies now are being forced to take a harder look at their portfolios and determine which assets, brands and capabilities will drive future growth. The real test is whether that scale can be turned into stronger audience affinity, better experiences and new sources of growth.
Competition in an M&A climate
Hollywood may be consolidating, but attention is not.
There may be fewer traditional media companies today, but there are dramatically more competitors for consumers’ attention.
Media companies are chasing the same things: consumer attention, subscription dollars, ad revenue, talent, and data and technology capabilities. And they’re not just competing with each other. They’re competing against some of the world’s largest technology platforms — and the armies of creators that they enable, not to mention the ever-proliferating competitors fighting for attention like video games, music, and even sports betting and AI chatbots.
While box office or TV ratings used to be the competitive unit, it’s become clear that the minute is now the competitive unit. Every platform is bidding for the next minute of someone’s attention. The affinity war is on.
The Impact on Content
So what does consolidation mean for how media companies think about IP? The instinct after consolidation is to assume fewer titles and fewer bets. But technology and AI are simultaneously driving the economics of content creation in the opposite direction.
The Paramount-Warner Bros. merger could eventually lead to more content, not less. But that requires a broader view of content, one that extends beyond traditional film and television programming.
It’s far past time to stop thinking of content as just “shows” and “movies,” and acknowledge that today’s franchises have ongoing relationships with their fans. Consumers are increasingly moving between long-form video, short-form video, gaming, social communities, merchandise and live experiences. Recent Accenture research found that 55% of consumers want social features within streaming services, while 58% say user-generated video can be just as entertaining as traditional media.
The next media battle won’t be held over who has the biggest content library. It’ll be about who’s developed the deepest fan relationship. This is equally appliable in film and TV studios as it is in newsroom, in broadcast trucks outside a sporting event, in record labels and music platforms, social video sites, sports betting apps and AI chatbots. In the affinity war, the future of content may be fewer isolated titles, but infinitely more experiences around the titles and brands that matter.
The Audience Is Consuming Everything
Streaming is no longer the industry’s organizing idea. The battle has expanded to every channel competing for consumer attention.
Audience fragmentation is the new reality, and consumer attention is scattered. Accenture research shows that the number of media types consumers choose most across 10 different entertainment occasions has expanded from just two in 2022 to six in 2025.
Streaming remains the dominant source for television content, as it now accounts for almost half of television usage according to Nielsen. Even so, while streaming was once the destination, it’s now just one stop along the way.
You Can’t Consolidate Your Way Out of Disruption
A merger can make you bigger overnight, but it can’t reinvent you overnight. Accenture research suggests the industry faces a steep challenge: more than nine in 10 media executives expect GenAI and new entrants to significantly reshape the industry within just two years. Meanwhile, 88% of media executives cite rigid technology stacks as a major transformation barrier, and legacy media companies spend roughly 6% of revenue on IT versus 9%-10% for media businesses within diversified technology companies.
M&A can create scale, but scale is only valuable if it funds reinvention. The critical question is whether companies will use that financial flexibility to invest in AI, technology, advertising, personalization, new experiences and new business model innovation.
The real dividend from consolidation isn’t cost reduction. It’s the ability to build the next generation of media businesses. So the strategic question isn’t “Are we big enough?” It’s “Are we different enough, and can we change fast enough?”
The Future of M&A in Media and Entertainment
M&A is likely to remain an important part of the industry’s strategic toolkit, although the nature of the transactions may evolve.
There is an obvious economic logic to additional consolidation where companies can achieve scale, eliminate duplication or strengthen distribution. However, in the affinity war with audiences fragmenting away from media’s legacy and streaming offerings, scale without reinvention is, sadly, merely increasing the size of the lifeboat drifting helplessly towards the coming waterfall.
As the newly named Skydance’s transaction marches toward an increasingly inevitable closure, everyone will naturally ask which big media company will merge next. However, the industry may be asking the wrong M&A question. The key item to consider is which capabilities are media companies missing.
For the forward-looking, the next phase of M&A is likely to focus less on scale, and more on acquiring capabilities that create differentiation. In capability-driven M&A, companies are seeking to add AI, advertising, gaming, creator, commerce or data capabilities that can create new growth opportunities and strengthen their ability to compete for audience attention. Roku’s multiyear history of acquiring ad tech fits this model — as does Fox Corp.’s planned acquisition of Roku, which adds not just ad inventory but ad tech, platform and CTV operating-system capabilities. Similarly, Netflix’s recent acquisition of Ben Affleck’s InterPositive accelerates the postproduction AI capabilities they can offer to creatives.
Indeed, Accenture research found that 80% of deals that outperformed sector averages saw dealmakers place significant emphasis on technology transformation and technology capability acquisition. The most capable acquirers also get better with every deal.
The strongest deals will add something the company lacks. Some of the most important transactions may therefore be smaller acquisitions that bring media companies new skills or technologies. In the war for affinity, legacy brands like Golf Channel and the New York Times are showing what growth and diversification become possible with segment-specific, affinity-targeted acquisition strategies.
The rallying cry in corporate development offices across Hollywood should be to stop buying more of yesterday’s media business. Instead, buy the capabilities you need for tomorrow’s. The industry’s future will depend on how effectively media companies turn their portfolios and capabilities into better products, stronger audience relationships, and more engagement experiences.
John Peters is Accenture’s global and U.S. media & entertainment industry lead, advising leading media, entertainment and sports organizations on growth, transformation and innovation. Based in Los Angeles, he works with clients across the industry on navigating disruption, harnessing emerging technologies and building new sources of value and competitive advantage.