The Rise of Big Tech in Entertainment and Its Implications for Traditional Media Stocks

The entertainment industry is undergoing a seismic shift as Big Tech firms—Google, Meta, Apple, and Amazon—reshape the landscape of television, streaming, and sports rights. John Malone, a media titan with decades of experience, has warned that consolidation is inevitable, with only a handful of players surviving the “overcrowded” streaming market [1]. His insights align with broader trends: tech giants are leveraging their financial muscle, global reach, and AI-driven personalization to dominate sectors once controlled by traditional media conglomerates. For investors, this raises critical questions about the future of media stocks and the strategic moves required to adapt to a rapidly evolving ecosystem.

Strategic Consolidation: The New Imperative

Malone’s prediction of consolidation is rooted in the economics of scale. Traditional media companies, burdened by fragmented content libraries and high production costs, struggle to compete with tech firms that treat entertainment as a loss leader for broader ecosystems [1]. For example, Amazon’s $1 billion investment in Thursday Night Football and Apple’s $2.5 billion MLS deal are not just about content—they are about locking in users for Prime memberships, Apple devices, and cloud services [2]. These bets are paying off: Amazon’s Prime Video subscriber base grew by 15% in 2025, while Apple’s sports content has driven a 10% increase in iPhone sales [3].

The financial stakes are enormous. U.S. sports rights spending hit $30.5 billion in 2025, a 122% surge over the past decade [3]. Tech firms are outbidding traditional broadcasters by offering global distribution and data-driven targeting. Netflix’s NFL Christmas game, which attracted 20 million viewers, and its boxing match between Mike Tyson and Jake Paul (which added 2 million subscribers) exemplify how streaming platforms monetize live events [4]. For traditional media, the message is clear: consolidation or risk obsolescence.

Consumer Behavior: A Generational Shift

Consumer habits are accelerating this transformation. By 2025, 90 million U.S. viewers stream sports events monthly, up from 57 million in 2021 [1]. Younger audiences, particularly Gen Z and millennials, prefer short-form content on social media over traditional broadcasts [4]. Platforms like TikTok and YouTube have become primary sources for highlights, behind-the-scenes footage, and real-time commentary, fragmenting attention spans and forcing media companies to rethink their offerings.

This shift has financial implications. Traditional media stocks, such as those of Fox and Warner Bros. Discovery, have underperformed compared to tech giants like Apple and Amazon [5]. The ESPN-Fox bundle, priced at $39.99/month, is a desperate attempt to retain relevance but pales against the all-in-one ecosystems of Big Tech. Investors must weigh whether traditional media can pivot to direct-to-consumer models or if further consolidation (e.g., mergers between Warner Bros. and Discovery, or Fox and Paramount) will be necessary to survive [2].

Investment Risks and Opportunities

For investors, the rise of Big Tech presents both risks and opportunities. On the one hand, tech firms like Apple and Amazon are now dominant players in sports and entertainment, with their stocks benefiting from cross-subsidized ecosystems [5]. On the other, traditional media companies face declining ad revenue and subscriber erosion. For example, regional sports networks (RSNs) have lost 30% of their audience since 2020, as fans opt for cheaper, ad-free streaming options [1].

However, there is a silver lining. Companies that adapt—such as Disney, which has integrated sports rights into its streaming and theme park offerings—could thrive. Similarly, niche platforms that focus on hyper-personalized content or hybrid models (e.g., live events + social media integration) may carve out profitable niches [4]. The key is agility: traditional media must either partner with tech firms or innovate to avoid being sidelined.

Conclusion

The entertainment industry is at a crossroads. John Malone’s warnings about consolidation and Big Tech’s dominance are not just theoretical—they are playing out in real time. For investors, the lesson is clear: prioritize companies with the scale, data, and ecosystem integration to dominate the streaming era. Traditional media stocks may still offer value, but only if they can navigate the transition by merging, innovating, or partnering with tech giants. As Malone aptly put it, “The future belongs to those who can adapt—or be acquired.”

Source:
[1] John Malone: Big Tech will dominate the future of TV [https://finance.yahoo.com/news/billionaire-media-titan-john-malone-big-tech-will-dominate-the-future-of-tv-134723149.html]
[2] Sports Media Rights: How Tech Giants Have Reshaped the [https://cultureofsport.substack.com/p/sports-media-rights-how-tech-giants]
[3] US spending on sports rights hits $30.5bn for 2025 [https://www.ibc.org/production/news/us-spending-on-sports-rights-hits-30-5bn-for-2025/22218]
[4] 7 Sports Viewership Trends In 2025 [https://www.gwi.com/blog/sports-viewership-trends]
[5] Big Tech Sports Stocks Help to Dominate Market in 2024 [https://www.sportico.com/business/tech/2025/big-tech-sports-apple-google-amazon-stock-market-1234822673/]