Deadline 2015 Look Ahead BadgeThis is a difficult year — tougher than usual — to predict media business developments. As Donald Rumsfeld might say, there are too many known unknowns.  The economy could continue to strengthen, or run into a ditch — especially if there’s open warfare between the GOP-controlled Congress and President Obama. We could see game-changing mega-mergers (see below). And we don’t know whether digital media will continue to make incremental encroachments on traditional TV networks’ eyeballs and ad dollars …or — with new offerings from HBO, Showtime, Sony, Dish Network and others — will hit a tipping point changing everybody’s business assumptions.

The uncertainty is evident on Wall Street, where investors live and die by predictions. The Dow Jones U.S. Media Index was up 11.3% this year (as of December 30) underperforming the S&P 500 (+12.8%). That’s a big loss of mojo from 2013 when the Media Index rose 48.5%, nearly 20 percentage points higher than the overall market.

To be sure, we’ll see Big MediaFox Celebrates "Bones" 200th Episode companies flex their muscles in 2015. The forces that led Rupert Murdoch to offer $76 billion for Time Warner (which management rejected) likely will intensify if Comcast completes its $45 billion acquisition of Time Warner Cable and AT&T closes its $48.5 billion purchase of DirecTV. If mega deals like these are possible, then which ones aren’t?

With all that in mind, here are a few questions industry insiders ponder as they look to 2015:

Will Big Media companies finally address their succession questions?

Corporate boards keep kicking this can down the road. But that might change in 2015. Sumner Redstone — who owns controlling stakes in Viacom and CBS and turns 92 in May — recently fed into Wall Street’s belief that his health has taken a turn for the worse: He struggled to read a one-sentence greeting at each of his companies’ latest earnings calls. How long can directors, in good conscience, keep other investors in the dark about who will call the shots when Redstone can’t?

There’s similar impatience with Rupert Murdoch’s refusal to say what would happen to his controlling stakes in Fox and News Corp if the 83-year old mogul left the stage. His son James, who’s co-COO of Fox, has effectively overcome Wall Street’s apprehension about him following his involvement in the company’s UK phone hacking scandals. He’s now widely seen not only as a credible successor, but as his generation’s most seasoned exec on the global stage. But another son, Lachlan, also could take charge — and daughter Elisabeth Murdoch, although less involved in company affairs, remains in the mix.

Vanity Fair New Establishment Summit - Day 2Disney bought itself a little time in October when it extended CEO Bob Iger’s contract to mid 2018 from 2016 — a date he had set to retire. Yet if Disney wants a smooth transition then it, too, will have to finally designate and begin to groom a successor.

Will streaming initiatives from Sony, Dish, HBO and others complement or cannibalize pay TV?

Execs planning these streaming services say that they’ll collect revenues from the 10 million homeowners — expected to hit 19 million in 2020 — who don’t subscribe to pay-TV. The millennial-loaded group doesn’t see the value, or can’t afford, $80+ a month for the full bundle that’s loaded with channels they don’t watch. The answer, it would seem, is to offer lower priced so-called “skinny” bundles with fewer channels.

But these plans could backfire if lots of pay-TV subscribers switch to the cheaper service, perhaps adding Netflix or something else. Distributors currently collect about $96 billion a year from consumers, half of which goes to networks that also collect $40 billion from advertisers. They, in turn, pay about $45 billion to content providers, Bernstein Research’s Todd Juenger estimates. “It may be too late to stop the forces that have been put in motion – we continue to question why the industry would put so much value at risk in pursuit of those relatively tiny SVOD licensing fees,” he says.

What changes will producers and distributors make in movie and TV release windows? 

Moguls look at windows the way research Image (2) netflix-logo__140423195416-275x154.png for post 718864scientists look at white mice. Netflix is especially eager to offer movies the same day they open in theaters, a plan that exhibition chains say they’ll fight. Netflix and IMAX will proceed anyway in August when they introduce The Weinstein Co’s Crouching Tiger, Hidden Dragon: The Green Legend on the streaming service — and whatever theaters will have it. (Domestic ones say they won’t.)

But other windows also are changing. Movies that have completed their theatrical runs increasingly hit the home video market on Electronic Sell-Through, which is growing, before DVD and Blu-ray discs. Films also show up on home video faster than ever: The wait averaged 3 months and 14 days in Q3 — down from 4 months and 4 days in the same period last year — the National Association of Theatre Owners reports. We’re starting to see TV shows premiere on VOD, where viewers can’t fast forward through ads.

extantAnd everything’s up for grabs when it comes streaming services: Programmers used to only let Netflix and others stream old shows, fearing that fresh material would make it easy for viewers to ignore television and its ads. Now the thinking is that online helps to build a fan base. CBS has been out front on this, letting Amazon re-run episodes of summer series including Extant and Under The Dome just four days after they first appear on TV.

Will we see lots of mega-mergers in 2015?

Probably. The smart money is Comcast Time Warner Cablebetting that federal officials won’t try to stop Image (1) ATT-DirecTV-logos__140521212527.jpg for post 737950the Comcast-TWC and AT&T-DirecTV deals. That would be seen as a greenlight for other deals. And a lot of companies are interested, especially relatively small, independent players: It’s conventional wisdom that the future belongs to large companies with the resources to take advantage of growth opportunities in digital media and overseas.

Starz, Lionsgate, DreamWorks Animation, Univision, and Regal Entertainment have been talking up deals. Many believe that sooner or later somebody will snap up AMC Networks, Scripps Networks, and possibly the TV assets of Madison Square Garden after it splits them from its sports and live entertainment businesses. Viacom is seen as a potential target, if Redstone is willing to part with the company that made him a big-time mogul. And who knows whether Sony will re-think its attachment to entertainment after the recent hack attack on Sony Pictures?

The market also includes several dalian_wanda_grouppotential buyers — even if you don’t include tech giants such as Google, Amazon, or Yahoo that still seem uninterested in owning traditional media. Overseas companies led by China’s Alibaba and Wanda Group, and Japan’s Softbank, are knocking on doors in Hollywood. Netflix could jump in as it steps up its TV and movie production. (Netflix-Lionsgate, anyone?) Fox’s aborted effort to buy Time Warner showed that Rupert Murdoch’s ready to pounce. CBS also is flush with cash, and could move if Redstone will allow.

But nothing is certain. There’s a chance that the FCC and Justice Department will try to block Comcast or AT&T. Justice surprised some Washington hands this year when it opposed National CineMedia’s acquisition of Screenvision. And buyers have limits: Starz and DreamWorks Animation walked away empty-handed from their most recent merger talks.

Is Virtual Reality really a thing?

Oculus Rift Development VersionSerious business people are becoming intrigued by the silly-looking goggles from Oculus Rift and Sony’s Project Morpheus. The mesmerizing, immersive, 360-degree video experience they offer “will become increasingly relevant to [the] film business and equate to more convergence of films and video gaming, providing an eventual new home entertainment growth window,” says Wunderlich Securities’ Matthew Harrigan. Facebook paid $2 billion in July for Oculus Rift. Lionsgate and Sony are working on videos for Virtual Reality platforms. And you can expect other announcements next month at the CES consumer electronics confab, and the Sundance Film Festival’s New Frontier program.