Media consolidation is entering a new phase, but not one defined solely by mega-mergers. Instead, industry leaders say the next wave of dealmaking will be more targeted, opportunistic, and, in some cases, driven by what large firms leave behind.

That was the view from executives at the Milken Institute Global Conference in Beverly Hills, where leaders from Sony Pictures, Fox’s Tubi, Alphabet’s YouTube, Black Bear Pictures, and East West Bank sketched out how M&A is transforming Hollywood, and where opportunities may surface next.

While combinations such as Paramount Skydance’s pending USD 111bn deal for Warner Bros. Discovery make headlines, Ravi Ahuja, chairman and CEO of Sony Pictures Entertainment, said strategic activity often occurs at a more granular level.

“We think about M&A in terms of IP and capabilities,” Ahuja said.

Sony’s USD 457m purchase of an 80% stake in the Peanuts cartoon franchise in March reflects that approach. It plans to pursue similar deals, he said.

But rather than acquiring scale for its own sake, Sony is looking to strengthen specific areas where it already has an advantage, including anime, gaming adaptations, and international content. The company’s USD 1.2bn acquisition of Crunchyroll in 2020, for example, expanded its position in anime, which is a category that has seen explosive growth.

Ahuja added that periods of consolidation often create secondary opportunities, as large companies divest assets or deprioritize business lines. “We’re always looking for those opportunities,” he said.

Spotlight on the creator economy

At Fox, which downsized in 2019 through the sale of USD 71bn of assets to Disney, the strategy is deliberately different.

Paul Cheesbrough, CEO of Fox’s Tubi Media Group, said speed and agility are more valuable than scale.

“We like businesses with strong entrepreneurs at the helm,” he said, pointing to Fox’s acquisitions in the creator economy.

Earlier this year, Fox bought Supercast Podcast, and last year it acquired interactive services company Shadow Lion, Mexico-based sports broadcasting platform Caliente TV, and creator economy business Red Seat Ventures. Deal terms were not disclosed. Last year, Fox also purchased 33% of Penske Entertainment for USD 125m.

Rather than absorbing and restructuring these businesses, Cheesbrough said Fox has focused on providing infrastructure like advertising, distribution, and marketing, while allowing creators to operate independently and serve audiences outside traditional platforms. Red Seat Ventures, for example, operates as a standalone entity within Tubi, and produces, distributes, and monetizes podcasts on YouTube and other digital channels.

YouTube CEO Neal Mohan described creators as “the startups of Hollywood,” highlighting how independent talent can scale businesses outside of conventional studio systems. YouTube has paid out more than USD 100bn to creators in recent years and continues to function as an engine for new content.

Studios in transition

For independent studios, the environment presents both risk and opportunity.

Teddy Schwarzman, CEO of Black Bear, described an industry still in transition, with many companies uncertain about their long-term positioning.

“There are a number of players figuring out whether they’re buyers or sellers,” he said.

That ambiguity, he suggested, will likely drive continued dealmaking in the near term.

Black Bear itself has historically focused on organic growth, but Schwarzman indicated a shift toward acquiring intellectual property libraries, which generate recurring revenue and can be redeployed across platforms.

“We are light on IP,” he said. “You’ll see us looking more at libraries we can scale and monetize.”

Joint ventures and other partnerships also feature in Black Bear’s playbook, Schwarzman said.

Global markets grow

Dominic Ng, CEO of East West Bank, which finances many cross-border media deals, said the traditional boundaries of Hollywood continue to erode.

Streaming has splintered audiences, advertising-supported platforms are resurging, and global markets are no longer secondary. Ng expects M&A activity to intensify, particularly as international players seek a broader footprint.

“Creativity is everywhere now,” he said.

Asia is emerging as both a major source of content and investment, he added, noting that the region already accounts for more than half of the world’s digital audience, with local titles increasingly traveling across borders.

Ng pointed to short-form content businesses and subscription-driven digital platforms as areas that are attracting investor interest globally.

The impact of AI

Technology is also shaping deal rationale, with artificial intelligence a recurring theme in board discussions.

Executives broadly agreed that AI will reshape production workflows by speeding up editing, improving pre-visualization, and lowering costs, but they stopped short of predicting a wholesale creative takeover.

Concerns around intellectual property, deepfakes, and misinformation remain, prompting companies to invest in safeguards, including tools designed to detect unauthorized use of voices, images, and copyrighted material.

While AI is expected to influence how media companies operate, executives said it is unlikely to fundamentally alter the industry’s consolidation dynamics in the near term. Rather, dealmaking continues to be driven by longer-running structural shifts that have redefined Hollywood over the past decade.

That period was dominated by vertical integration including AT&T’s spin off of WarnerMedia and USD 79.4bn merger with Discovery in 2022, and Amazon’s USD 8.45bn acquisition of MGM that same year.

Smaller targets take center stage

The next phase is expected to be more fragmented, reflecting a shrinking pool of independent studios and a shift toward smaller transactions.

Executives said large-scale mergers will continue, but much of the strategic activity will occur in targeted deals involving niche platforms, creator networks, and specialized content libraries.

For many companies, the core strategic question remains unresolved: whether to scale up or stay nimble. For now, the answer appears to be both.

As Schwarzman put it, the industry is still “figuring out which side of the trade you want to be on.” In the meantime, dealmakers will continue to search for the next big merger, as well as overlooked assets that fall through the cracks.