It started with a lawsuit and some failed media mergers.
AOL-Time Warner was a disaster. What was supposed to unite the leading internet company with the leading media company resulted in something less than the sum of its parts. Likewise, News Corp. deal for MySpace flailed, ultimately resulting in a money-incinerating sale of the early social platform.
But not every deal was so cursed. In 2006 Google bought YouTube for $1.65 billion, in what was in hindsight a bargain price. Just a few months later Viacom sued Google over the platform, alleging copyright infringement on an industrial scale. Two months earlier, the DVD-by-mail company Netflix began to test streaming video content on it website.
And The Walt Disney Co., looking at how the iPod and iTunes wreaked havoc on the music business, cut a deal with Apple to sell its movies and TV shows on the iTunes store, while its competitors still viewed it as a threat to their very existence, having seen what $0.99 songs did to record labels.
“Disney and Apple are offering customers a new and exciting way to experience television,” Apple founder Steve Jobs said at the time. “To be able to download your favorite TV shows right from iTunes for just $1.99 and then watch them on your computer and iPod is revolutionary.”
In the mid-aughts, streaming video to computers, cutting deals with big tech, and creator-driven content was truly groundbreaking. Now it’s commonplace. And every media company is in business with Apple and Google.
20 years later and the entertainment business once again seems to be at an inflection point. But it has echoes of that era. Failed mergers, legal threats against Google, and Disney getting ahead of the disruption by inking deals with the disruptors.
When we look back, December 2025 could end up being a turning point in media, with deals likely to reverberate for decades to come.
A pair of failed mergers (AT&T and Time Warner, and WarnerMedia and Discovery) have now led to Warners once again being on the block, and the winner will either be a tech-led entertainment company in Netflix, or a tech-funded entertainment company, in David Ellison’s Paramount. What the winner does with that company could change the course of streaming video, of movie theaters, and of AI-driven content.
To that end, Disney is cutting a billion dollar deal with OpenAI, bringing its characters and IP to its platform even as others are skittish, once again leading the charge.
“We’ve always felt that if [technological change] going to happen, including disruption of our current business models, then we should get on board and figure out how we advantage our company and our shareholders, by moving forward with a sense of optimism and being aggressive about it,” Iger said Thursday.
At the same time, Disney is threatening legal action against Google, writing that the tech giant “has deeply embedded its infringing video and image AI Services into its broad family of products and services actively used by over a billion people.” Other AI companies, including OpenAi and MidJourney, face lawsuits and legal threats over their generative AI tech, which is trained in part on the copyrighted work of entertainment companies.
And YouTube, the tech interloper back in the mid-aughts, is now a dominant player, taking up more TV time than most entertainment companies, and on the verge of becoming the largest pay-TV provider in the U.S.
It is not entirely clear where this all leads, but the echoes of the aughts are hard to ignore.
Technology disrupting entertainment, panic-driven dealmaking, and intellectual property as the ultimate prize. Platforms that allow individual creators to reach the masses in ways that were previously impossible.
The future of Hollywood is being written before our eyes, but the ending is still up for grabs.
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