As Paramount Global and Warner Bros. Discovery explore a possible merger to ensure their future survival, media companies are also making moves. Independent Hollywood studio Lionsgate has split its company into streaming, studio, and cable channel platforms. The move was made to prepare for the streaming era and compete with Netflix and other big tech companies.
The spin-off is another step in Lionsgate's "arms dealer" strategy of supplying ammunition to platforms that need stronger weapons (content) as the streaming wars heat up. To create these weapons, Lionsgate merged with a special purpose acquisition company (SPAC) to raise capital and launch an initial public offering (IPO).
At the same time, Lionsgate's cable TV channel business and streaming Staz+ will have to survive on their own, away from the studios. First, Lionsgate could consider selling its streaming or cable TV channels. However, it could also build a sustainable business by bundling with other streaming services or by taking on outside studios in specialized genres. Of course, free ad-supported streaming TV (FAST) is also the future of the channel business. Hunger Games TV, 'John Wick' channel is on the horizon. Lionsgate is a great benchmark for Korean studios and stations struggling to find their footing in the age of decentralized global streaming.
Lionsgate's spin-off could also be a lesson for Korean media companies. JTBC and CJ ENM, which have already separated their studios and stations, can take a cue from Lionsgate's move to increase the individual value of their studios and stations. They launched content studios (Studio Dragon, SLL) in the early 2020s and have been struggling to find their footing in the market. They didn't have enough IP to survive as independent studios. They also relied too heavily on Netflix for international expansion.
Specifically, their problem is Station, not Studio. The focus on spinning off the studios hasn't led to a well thought out survival strategy for the stations. Ad revenues were plummeting and cord-cutting from cable to streaming was on the rise, but they were not prepared for it.