Given how turbulent 2023 turned out, saying it was a challenging year for media feels like the understatement of the decade.
Here's what we survived: Two lengthy strikes by Hollywood writers and performers that paralyzed new production, crippling the business in ways we're just beginning to fathom. Layoffs in the media sector totaling more than 20,000 positions, according to one studyLinks to an external site.. Hikes in subscription fees, which hit consumers of almost every major streaming service, including Netflix, Disney+, Hulu and Apple TV+, and confrontations between media companies and cable providers leading to questions on whether cable TV can even survive in the streaming era.
But experience has taught me that, when it comes to the media business, things are rarely as bad – or as good – as they initially seem. So, my predictions for media in 2024 may sound negative — based mostly on a growing cynicism about the abilities of those leading our biggest media companies to meet a historically challenging moment. But I'm also, oddly, a bit optimistic.
In other words, as clueless or greedy as media executives get, this critic remains convinced talented creators, journalists and performers will find a way to excel.
We'll probably have fewer TV/streaming series. But that will likely be a good thing.
One minute, analysts were complaining about the glut of TV and streaming programming at the beginning of 2023 — offering too much material for anyone to keep tabs on — before the cancellation of shows and the tactic of completely removing titles from streaming services as tax write-offs drew howls of criticism as the year wore on.
Unfortunately, the numbers won't get much better in 2024. I fear the economic hit media companies likely took from the strikes and the added costs incurred by new contract terms will result in fewer shows getting made and even more shows getting the ax in the new year.But the silver lining here: given that 2022 saw nearly 600 separate series available to viewers, the industry was long overdue for serious shearing, anyway.
The key to bringing the glut of TV down to a manageable level for the average consumer is ensuring the right programs survive – including shows featuring marginalized groups and cultures. After a year in which programs like A Black Lady Sketch Show, Reservation Dogs, the LGBTQ-centered reboot of A League of Their Own and the Black-centered revival of The Wonder Years all went away, the industry must work overtime to ensure diversity doesn't decline along with the number of TV series.
One of the sneakiest media trends in 2023 was all the different techniques streaming services used to squeeze additional revenue from subscribers. Amazon announced, for example, that Prime Video subscribers will begin to see ads in their streaming contentLinks to an external site. on Jan. 29, but customers can pay an additional $2.99 for ad-free content. Netflix eliminated its cheapest ad-free tier Links to an external site.months ago, forcing those who wanted to avoid ads to buy the pricier, premium subscription. And lots of services cracked down on password sharing while boosting prices.
Still, streaming services' drive for profit also creates more opportunities for consumers. Some platforms have worked out limited deals to share content with other services, bringing select HBO titles to Netflix. Streamers are also bundling services, with Disney offering Disney+ and ESPN+ to Charter cable customers for a single price, while Verizon has brought together Max and Netflix. We're back to the future as companies and consumers rediscover the cost savings of advertisements and bundling that were always hallmarks of cable TV.
I also think we're going to see a landscape where there is a small number of giant streaming services and a bunch of boutique specialty platforms, with midlevel players like Peacock and Paramount+ facing increasing economic pressure to join bigger companies (hence the rumors about Warner Bros. Discovery talking about mergingwith Paramount Global and rumors that Comcast might also benefit from buying Paramount.)
Journalists took a serious hit in 2023. But the fight against misinformation is only beginning.
Expect that fight to only grow more intense in 2024, as the presidential season unfolds and people actually begin voting in primaries (I'm still upset by news items that say a given candidate is "ahead" when no one has voted yet, and we're only talking about poll results.) Kudos to news outlets that have adopted journalism professor Jay Rosen's admonition to avoid "horse race"-style reporting to cover "the stakes" for the next election, particularly The Atlantic's entire issue devoted to the possible consequencesLinks to an external site. if Donald Trump wins a second term as president.
Still, in addition to the job losses, the media's addiction to toxic but buzzy personalities remains a serious flaw. Too many supposedly serious news platforms refuse to accept that the worst outcome for shameless attention addicts like George Santos isn't breathless coverage denouncing his lies, but no coverage at all. No more updates on certain people's Cameo posts or social media outbursts — yes, NPR has covered such thingsLinks to an external site., too — the real solution to handling some awful public figures is to deprive them of the media oxygen they need to survive.
Late night television and cable TV will continue to decline. But they will also survive.
I've said and written this a few times: New media doesn't kill old media. It just forces it to change.
The scariest media moments of 2023 involved watching Internet-led disruption come for familiar forms of media, like late night TV and cable systems. Big names like The Late Late Show's James Corden and The Daily Show's Trevor Noah and Roy Wood Jr. left the late night genreLinks to an external site., only to be replaced by a game show and... nothing, yet.
CBS might yet find a hit with After Midnight, the sort of game show it tapped to replace Corden's program, and Comedy Central may yet conclude its yearlong spasm of guest hosts by finding the one person ready to take The Daily Show into the future. But it feels more like a sector of media that produced an awful lot of modern comedy stars is on the ropes with no clear way back to the top.
Similarly, accelerated cord-cutting and homogeneity of content – cue the jokes about how ridiculous MTV's marathon airingsLinks to an external site. of Ridiculousness have become – threaten to permanently hobble the industry that gave us modern-day quality TV in HBO, CNN and ESPN.
Because I'm also an optimist, I'm hopeful both these corners of media will find new directions in 2024, led by innovators we may not even know yet. But they're likely to be in a much-reduced form, a bracing reminder that change eventually comes for us all in media.
And, sometimes, what's left is a shadow of what once was.
The Magic Kingdom has had a roller-coaster year in the middle of a political firestorm but posted strong enough results to remain in the top 100 of the Global 2000.
By Marisa Dellatto. Forbes Staff
The return of a former CEO. A legal battle with the Florida government. The layoff of thousands of employees.
Despite Walt Disney Co.’s tumultuous year, the brand ranks No. 87 on the Global 2000—up seven spots from 2022—and is the second-largest media company for the second consecutive year.
Less than one year after leaving, Bob Iger made a surprise return to Disney in November, replacing Bob Chapek as CEO. Shortly before Chapek stepped down, he warned employees about coming cost cuts, which Iger has seen through. During Disney’s first-quarter earnings call, Iger announced plans to cut $5.5 billion of annual expenses and 7,000 jobs. A majority of the reductions, $3 billion, will come from content spending not related to sports, amid a reorganization that “will reestablish the direct link between content decisions and financial performance,” Iger said. The company is arranging into three divisions: Disney Entertainment, ESPN and ESPN+, and parks, experiences and products.
In another radical step, Disney’s board sued Florida Gov. Ron De Santis in May, claiming the Republican presidential candidate waged a “targeted campaign of government retaliation” in taking over the company’s self-governing theme park district after executives criticized the state’s “Don’t Say Gay” bill.
Disney is also fighting competitors Comcast (No. 51), Netflix (No. 223), Warner Bros. Discovery (No. 559), Fox (No. 719) and Paramount (No. 857) for subscribers to its streaming services Disney+, ESPN+ and Hulu.
Forbes uses data from FactSet research to create its list of the largest public companies based on four data points: assets, market value, sales and profit. Market-value calculations are as of May 5, and include all common shares outstanding.
Though the fourth-largest media company, Netflix still reigns supreme by subscriber count— 232.5 million—and is pushing for more. The streaming giant launched a cheaper, ad-supported plan last year (Disney+ released its own version just one month later). And last month, the company began cracking down on users who share their accounts with people who live outside their households, something the brand claimed occurs in 100 million homes.
Along with its own cost-cutting crusade, Warner Bros. Discovery—the fifth largest media organization—launched its new streaming service, Max, in May, combining the libraries of HBO Max and Discovery+—though the latter will still continue to exist as a standalone service.
Behind Comcast and Disney is telecommunications company Charter Communications (No. 138) as the third-largest media company, PR brand Publicis Groupe SA (No. 618) as the sixth, marketing company Omnicom Group (No. 709) as the seventh, Dish Network (No. 723) ninth and WPP (No. 763) tenth.
Here are more details on the top 10 media companies.
It’s human nature for a new year to bring optimism and hope.
For executives, investors and employees in the entertainment and telecommunications industries, 2024 is set to disappoint.
Maybe that’s too grinchy. Some things will get better. The actors’ and writers’ strikes are over. The 2024 U.S. presidential election should help boost advertising dollars as global TV ad revenue is on pace to decline 18% this yearLinks to an external site., according to media investment firm GroupM.
Still, legacy media companies including Disney, Paramount Global,Links to an external site. Warner Bros. Discovery and ComcastLinks to an external site.’s NBCUniversal are trying to figure out what investors want since pulling back on a narrative of subscription streaming video growth that dominated 2020 and 2021. Warner Bros. Discovery and Comcast have outperformed the S&P 500 in 2023, though just barely. Disney and Paramount Global have underperformed.
The overriding narrative for 2024 appears to be one of uncertainty on three key fronts: interest rates, regulatory policy and overall growth prospects. The industry should have more clarity in 2025 on all three topics to propel it forward, said Corey MartinLinks to an external site., managing partner at entertainment law firm Granderson Des RochersLinks to an external site.. Next year will probably be defined by preparation for action rather than actual transformation, Martin said.
“2024 is probably going to be a year of sustained uncertainty,” said Martin. “It’s really a continuation of a pattern we’ve seen since the midpoint of 2022.”
The Jerome Powell factor
After the benchmark 10-year Treasury yieldLinks to an external site. hit a 16-year high in October, rates have come down as the Federal Reserve said it’s planning for multiple cuts to come in 2024 and beyond. The Fed’s overnight borrowing rate is at between 5.25% and 5.5% — significantly elevated from where rates had been since the financial crisis of 2008.
Rate cuts next year could push transformational deal-making to 2025. If media or technology companies want to acquire large assets and don’t have the cash on hand, they’ll want to wait for cheaper money.
“I had lunch in late November with the CEO of a major studio, and what he expressed is uncertainty around operating in this monetary policy environment,” said Martin. “What is the cost of capital? Am I better served punting until 2025 where I have more clarity when interest rates come down or remain static?”
Still, major deals could be announced in 2024 with an assumption that the process of closing them will take 12 to 18 months. By that time, companies may bet on interest rates falling to levels more in line with the past 10 years.
Shari Redstone has held talks for the last few months to potentially sell National Amusements, the controlling holding company of Paramount GlobalLinks to an external site., according to people familiar with the matter who declined to be identified because the discussions are private. If that deal occurs in 2024, it could kick off a wave of strategic transactions, including selling dying cable networks to private equity firms, throughout the media and entertainment industry regardless of the macroeconomic environment.
There’s additional concern Federal Trade Commission Chair Lina Khan or any other regulatory leaders appointed by President Joe BidenLinks to an external site. in 2024 and beyond won’t look kindly on the combination of cable and wireless assets. While companies in Europe own both, cable ownership is still separate from wireless network operators in the U.S. Bringing companies such as Comcast and CharterLinks to an external site. together with either AT&TLinks to an external site., VerizonLinks to an external site. or T-MobileLinks to an external site. could increase corporate pricing power and eliminate competition, which Khan would likely see as anti-competitive.
There’s also the ongoing dance between NBCUniversal, Warner Bros. Discovery and Paramount Global. Many media watchers assume that two of those three companies could merge, leaving the third without a dance partner. How regulators would view a combination of those assets is still to be determined. A deal between NBCUniversal and Paramount Global, which would put together broadcast networks CBS and NBC under one corporate roof, seems like a regulatory nonstarter without divesting one of the networks.
“There will be a final round of consolidation in the industry,” said John Harrison, EY Americas media and entertainment leader.Links to an external site. “Structurally, it’s not sound in terms of the economics for streaming. Companies need to get their cost structures right as linear TV winds down. But there’s a hesitancy to pull the trigger on anything massive when you know how fast the disruption is taking place, and you’re looking at an 18- to 24-month-long review process to get a deal approved.”
Ironically, that could make some companies less bothered by regulatory issues. If executives feel both Republican and Democratic administrations may be obstacles, corporate boards could decide to approve moving forward with transformational deals sooner rather than later. If a deal is blocked, they can try their luck in court.
Traditional TV subscribers again dropped by the millionsLinks to an external site. this year. As eyeballs diminish, advertising dollars will also decline. Next year will also likely be another year of industry losses for most major streaming services. Disney, Paramount Global and NBCUniversal have all pegged 2025 as their flagship streaming services’ first full year of profitability.
But the industry remains stuck at depressed valuations relative to two or three years ago. Disney is preparing for a proxy battleLinks to an external site. with activist investor Nelson Peltz and former CFO Jay Rasulo, who plan to campaign for board seats based on Disney’s poor performance relative to the S&P 500.
“The [Disney] board and CEO [Bob Iger] appear to have no conviction that things will get better,” Peltz’s Trian Fund Management said in a statement Thursday.
Beyond financial metrics, several executives privately acknowledged morale has become an increasing concern at legacy media companies. When uncertainty is so high, with few clear growth prospects to generate excitement and layoffs rampant, it’s hard to generate cultures of prosperity and retain top talent. One executive noted he’s increasingly hearing from peers that running media and entertainment companies just isn’t as fun as it was five or 10 years ago.
2024 should be an inflection year for the industry. Either conditions will improve or they won’t. If they don’t, expect fireworks in 2025.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
Business, Global and Legacy Media Overview Flashcards - Media Business
