PARQOR is the handbook every media and technology executive needs to navigate the seismic shifts underway in the media business. Through in-depth analysis from a network of senior media and tech leaders, Andrew Rosen cuts through what's happening, highlights what it means and suggests where you should go next.  

In Q4 2022, PARQOR will be focusing on four trends. This essay focuses on the themes, "Media companies have consumer credit cards on file. What happens next?" 

After the appearance of Co-CEO Reed Hastings at this week’s Dealbook Conference, Netflix now seems to have two value propositions to investors:

1. Its investor relations website says its long-term view is “streaming entertainment is replacing linear TV”; and,
2. Hastings’ told the Dealbook Conference that “We want the brand to be the most exciting entertainment on earth, and where you want emotional stimulation. And for us that is around films, series and games”

Games and streaming movies and TV series over the Internet are two very different value propositions. The first has been the long-running and ongoing paradigm shift away from traditional linear and theatrical distribution channels. Until recently, it was a value proposition that had investors excited about the future of media companies with streaming services: Netflix’s enormous scale and the enormous scale of the Internet reflected the exciting potential for the future of movies and TV.

To date, investors have soured on that vision, though as of late they have soured less — as of today, Netflix’s stock is down 46% year-to-date after being down as much as 70% year-to-date. It is up nearly 13% over the past three days. This all raises an interesting question: is Netflix’s “new” vision statement working? Are investors warming up to games and a broader value proposition of “the most exciting entertainment on earth”?

In other words, when the value proposition of streaming fails to win over both investors and the Total Addressable Market of consumers, what is a better value proposition? One that is as simple as the linear model (profitable distribution at scale), or a more Internet-focused vision of “streaming entertainment is replacing linear TV” that includes gaming?

Key Takeaway

What will be the media business models around “exciting entertainment” and “beloved characters in worlds” that can solve for fragmentation of audience behaviors? No one has any good answers for investors, yet.

Total words: 1,700

Total time reading: 7 minutes