When I speak to people in and out of the media business, they all ask one question: “How did we get here?”
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As we see layoffs at WBD, incoming at Paramount and then so many others, people want to know why did this happen? These are crown jewel companies with valuable IP!
What I saw inside one of them was two countervailing forces:
1. The need to for stockholder satisfaction at the expense of customer satisfaction
2. The innovator’s dilemma writ large
What does that mean?
1. Once streaming entered the arena, Wall Street valued Netflix at tech company multiples and encouraged legacy media to throw everything at getting into streaming and growing fast. Mergers, consolidation and more prevailed in the race to get bigger. Everyone had the data - only a few of these streamers would survive, because customers didn’t want dozens of services. They wanted 3-4. But in a rush to satisfy Wall Street, everyone got in. And when Wall Street changed their minds in 2022, the companies were left holding the bag.
2. When I started in media in 2007, we all knew streaming and digital was the future. We spent 75-80% of our time working on it. But the money that the cable bundle provided was hard to walk away from. Especially when trying to sell/merge a company. Legacy media could have and many wanted to get into streaming sooner. But it took money and time and a sharing of information company wide that could have been scary.
So the end result? Everyone gets into streaming too late, trying to satisfy Wall Street, invests in content over building technology, loses focus on the consumer, loses focus on the brand and hopes for profitability.
Whats the solution? Refocus. These are strong brands. Gen Z is the future. And they’ve got some attachment to the IP. But you’ve got to build a brand that works in streaming, linear, YouTube, TikTok, consumer products, theme parks and beyond. Multiple revenue streams, deeper engagement and focus on steady growth and nurturing fandom.
Sound familiar? It should. It’s what Disney is doing. Universal has done it. It’s what we were trying to do before I left Warner Bros Discovery.
Look at Gen Z. See how they interact with brands, how can you deepen their fandom and how can you monetize multiple touch points. Ignore Wall Street. Focus on growing vs cutting. If you look closely, you’ll see many brands doing this successfully in and outside of legacy media.
Want me and talented colleagues to help? DM me. Needmore Stories is open for business and I’m #opentowork for the longer term.
