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The Medium delivers in-depth analyses of the media marketplace’s transformation as creators, tech companies and 10 million emerging advertisers revolutionize the business models for “premium content”.
Each fiscal quarter, The Medium identifies three or four new trends that have momentum and seem poised to play out at a larger scale in 2023. These key trends pinpoint dynamic and constantly evolving developments in the media marketplace that are emerging from incremental shifts or fundamental changes. The bi-weekly mailings analyze these trends as developments emerge in real-time.
Read the three key trends The Medium will be focused on in Q4 2023. This essay focuses on "In the shift from wholesale to retail models, there are many business models that delight consumers but no single, dominant one."
Company-wide cost restructurings and streaming profitability were two big themes in Disney’s and Warner Bros. Discovery’s earnings calls yesterday. Warner Bros. Discovery reported $111 million of adjusted EBITDA and a path to “at least break even or even profitable across the D2C segment”. Disney confidently projected a path to profitability by Q4 2024, despite reporting losses of $420 million in the segment. It also reported it is on track to achieve around $7.5 billion in cost reductions within the company, approximately $2 billion more than it had targeted earlier in FY 2023.
But there is still an uncertainty lurking within these stories to investors, best captured in a question from Bank of America’s Jessica Reif Ehrlich on Warner Bros. Discovery’s earnings call: Is the growth in streaming “enough to offset these linear challenges” given that linear is Warner Bros. Discovery’s “biggest business?”
By “challenges” she is referring to Warner Bros. Discovery’s pro forma linear advertising revenue fell nearly $1 billion in the first nine months of 2023. Her framing of the question is wickedly clever and deceptive in its simplicity. Because on a basic level, it effectively asks, “As linear disappears, what’s left to be excited about?”
Despite a lot of selling, neither Disney nor Warner Bros. Discovery offered investors a roadmap through “a generational disruption”. If there is growth in streaming and games to be found, management's answers on earnings calls suggested new management is necessary.
Total words: 1,300
Total time reading: 5 minutes
This question provoked a robust and fascinating response from Zaslav and his CFO Gunnar Wiedenfels. Zaslav started off by conceding there is longer-term uncertainty in the advertising marketplace. Wiedenfels followed by changing tone, pushing an aggressive sales pitch that pushed back on ...