Make no mistake, the “remarriage” of the two businesses that were forcibly separated 13 years ago is less one of convenience than necessity.
And the point made by the younger Redstone has resonance – content is king, particularly when you are up against Netflix, Amazon and a revitalised Disney.
Perhaps more so when they are scrapping over an ever-shrinking share of eyeballs and an advertising pool decimated by the internet.
You need a source of income. And in this brave new world content equals income.
In the pre-digital era, the UK tended to be around two years behind the States on anything from technology to entertainment; for business, the lag might be a little longer.
These days, however, in the connected world, the good and the bad tends to migrate east almost instantaneously.
The numbers tell a story
Here’s some numbers from Shore Capital on the changing face of British media that illustrate the point.
Among 18 to 34-year-olds, YouTube is now the most the most popular video channel, followed by Netflix.
More broadly, Ofcom found that 42% of adults now consider online video services to be their main way of watching TV and film.
In other words, the UK is in the same boat as the US, with traditional purveyors of programming in a brutal game of fisticuffs with Silicon Valley’s online upstarts.
So, where does that leave ITV? Well, its recent results revealed a business where advertising revenues are in managed decline (they fell a "better than expected" 5% in the first half).
And while its online endeavours are to be commended, ITV is very much reliant on being leaner and fitter to maintain the bottom line. In other words, it is redoubling its cost cutting efforts.
The threat of Netflix and Amazon
It’s not blind to the threat of Netflix, Amazon et al.
ITV Studios arm is churning out ratings winners such as Bodyguard and Poldark (both screened on the BBC).
And it has enjoyed huge success with Love Island, which has drawn the key 18-34 demographic to ITV2 (and a few million others of later vintage that should know better).
With Britbox – a collaboration with the BBC – it is going toe to toe with the giants of video on demand.
ITV plans to spend around £65mln on the new platform, which seems an absurdly small figure when set against the £9.5bn Netflix reportedly spent on content last year.
But then Britbox has the content, if it’s old episodes of Inspector Morse or the Good Life you want and ITV will point out that the investment is going directly into technology.
Yet its still an unfair match-up even the combined programming budgets of the Beeb and ITV, which come nowhere near the spending power of a Netflix of Amazon.
ITV’s share price, which has fallen 37% in the last year, suggests the company’s efforts are both too little and too late.
ITV an attractive takeover target
So, what’s the solution? In the Shari Redstone world where content is king the obvious solution for boss Carolyn McCall would be to go out and buy in content.
Three years ago it made a dart for Peppa Pig creator Entertainment One, which also produces American successes such as the Rookie and The Walking Dead.
Back in 2016 it offered 236p a share, or a short £1bn. Today the business is worth £2bn.
Clearly it’s going to chafe a little with investors if ITV revisits this particular story.
Perhaps E1, which recently saw Hollywood mogul Mark Gordon step down as president and chief content officer of film and television to shift his efforts to developing and producing content for the company, may want to turn the tables.
As ambitious as a reverse takeover transaction of this kind might seem, ITV’s shares are trading at a dirt cheap seven-times next year’s earnings.
And from ITV’s standpoint the Viacom/CBS-style marriage of convenience may provide a much better ‘out’ than being picked off and broken up by private equity, or being gobbled up amuse bouche-like by ‘Amaflix’.