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Legacy media companies enter dark times as failures mount and Netflix rises again – UnlistedNews

Bob Iger, CEO of The Walt Disney Company, left; David Zaslav, CEO and Chairman of Warner Bros. Discovery, center; and Bob Bakish, President and CEO of Paramount Global.

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Businesses and industries have ups and downs. The legacy media industry is in a valley.

The first half of 2023 has been a colossal disappointment for media executives who wanted this year to be a rebound from a terrible 2022, when a slowdown in streaming subscribers lowered ratings for Netflix, Disney, Discovery by Warner Bros. and world paramount about half.

Instead, investors once again got excited about Netflix’s future prospects as it cracked down on password sharing, which could lead to tens of millions of new signups. Netflix shares have risen in the past five months, outperforming the S&P 500.

Meanwhile, legacy players can’t get out of their own way.

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Netflix vs. S&P 500 over the past five months.

“When it rains, it pours,” said Rich Greenfield, a media analyst for LightShed. “It keeps getting worse.”

It’s been a bumpy ride for Disney CEO Bob Iger since he returned to lead the company late last year. Disney recently finished lay off 7,000 employees. The chief financial officer, Christine McCarthy, resigned last week. the company is pulling programming from your streaming services to save money. His animation business is in a big slump, with his latest Pixar movie, “Elemental,” shooting the lowest opening weekend gross for the studio since the original “Toy Story” premiered in 1995. The stock has struggled over the past five months.

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Disney vs. the S&P 500 in the last five months.

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Warner Bros. Discovery vs. the S&P 500 over the past five months.

world paramount It cut its dividend last quarter as broadcast losses peaked this year and a weak advertising market exacerbates a terminally ill cable network business. Wells Fargo released an analyst note on Friday saying the bull case and bear case for the company were the same: sell piecemeal. Warren Buffett, perhaps the most acclaimed investor in history, said CNBC than Paramount broadcast offer “fundamentally not a good business.”

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Paramount Global vs. the S&P 500 over the past five months.

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Fox Corp. versus the S&P 500 over the past five months.

NBCUniversal has weathered the storm better, protected by its parent company, Comcast, which derives its revenue from cable and wireless assets. The setbacks of the aforementioned are also taken advantage of. msnbc became the #1 cable news network this month for the first time in 120 weeks, unseating Fox News amid coverage of the federal impeachment of former President Donald Trump. Universal’s “The Super Mario Bros. Movie” is by far the biggest blockbuster of the yearhowever, the shares have not moved much.

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Comcast vs. the S&P 500 over the past five months.

All of this is happening with a protracted Hollywood writers’ strike in the background with no end in sight. Writers know that the longer the strike lasts, the more pain will be inflicted on media companies, which will eventually run out of ready-made scripted content. Zaslav recently gave a start address to Boston University and was drowned out by booing and “pay your writers” chants.

This week may bring even more bad news. Film and television actors will join the writers on strike unless they reach an agreement with Hollywood studios before Friday.

The beneficiaries of the Hollywood job closures will likely be YouTube, TikTok and Netflix, which continue to produce international content unaffected by the strike, Greenfield said.

Legacy media may get a bit of a breather if advertising recedes as the 2024 US presidential campaign heats up. But there is still little evidence that investors reward media companies simply for cutting costs. There is currently no strong growth narrative for legacy media, and prospects for consolidation are cloudy as regulators block media-related deals such as Microsoft’s acquisition of Activision and proposed purchase of Simon & Schuster by by Penguin Random House.

The industry has just wrapped up its annual publicity gala in Cannes, France. Legacy media executives were still spending company dollars to make the trip to hang out on yachts and drink rosé wine. The backdrop was as beautiful as ever.

But the outlook is bleak.

Disclosure: Comcast owns NBCUniversal, which is the parent company of CNBC.

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Sara Marcus
Sara Marcushttps://unlistednews.com
Meet Sara Marcus, our newest addition to the Unlisted News team! Sara is a talented author and cultural critic, whose work has appeared in a variety of publications. Sara's writing style is characterized by its incisiveness and thought-provoking nature, and her insightful commentary on music, politics, and social justice is sure to captivate our readers. We are thrilled to have her join our team and look forward to sharing her work with our readers.


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