The Medium
Member Mailing: An Update to "The Daisy or The Flywheel?"
Good afternoon,
The Medium identifies a few key trends each fiscal quarter that reveal the most important tensions and seismic shifts in the rapidly and dramatically changing media marketplace. The key trends help you answer a simple question: "What's next for media, and where's it all going? How are the pieces lining up for business models to evolve, succeed, or fail?"
Read the three key trends The Medium will be focused on in Q3 2023. This essay focuses on "Legacy media companies are throwing in the towel on their bets to own the consumer relationship in streaming and beyond."
In last month’s “The Daisy or The Flywheel?”, I wrote about how the consumer's needs in the retail/direct-to-consumer model are far more multivariable and complicated to be served by *only* a streaming service, or only a news subscription.
The Publisher of The Athletic has previously explained The New York Times (NYT) bundling strategy with a diagram of a daisy. The diagram starts with a core value proposition — news from the NYT — and then builds out complementary services for which subscribers will pay a marginal subscription fee. Subscribers may sign up for only one of those services (e.g, Cooking or Games), or multiple. I also discussed AMC Networks as an aspiring daisy model.
Disney and Sony anime subsidiary Crunchyroll have business models that can be explained by a “flywheel”, or a connected ecosystem of businesses where improvements in one business segment can help to boost the performance of other business segments. The flywheel is a growth model popularized by Walt Disney’s famous 1957 multispoke diagram.
In recent quarterly reports, we learned more about how both the daisy and the flywheel models are evolving. Both AMC Networks and the NYT shed valuable new light on their respective pursuits of daisy models. Also, Disney’s ESPN partnership announcement with Penn Entertainment this week shed new light on its ongoing attempts to reimagine its famous flywheel with direct-to-consumer models.
Key Takeaway
It is rare to receive any clarity on the future of consumer first, retail first business models from media companies. That is why The New York Times' Q2 2023 earnings call was significant.
Total words: 1,700
Total time reading: 7 minutes
AMC Networks
On the previous earnings call in May, CEO Kristin Dolan told investors “it's essential” that AMC Networks evolve into “a more customer-centric organization.” CFO Patrick O’Connell recently told the Gabelli Funds 15th Annual Media and Entertainment Symposium “streaming for us is ...