Good afternoon,

The Medium identifies a few key trends each fiscal quarter that reveal the most important tensions and seismic shifts in the 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."

On Tuesday my podcast interview with The Rebooting’s Brian Morrissey went live. Brian has long been one of my favorite interviewers in digital media, and I’ve had the pleasure of getting to know him over the past two years. We discussed “The Doom Loop of the Mogul”, and why I’m on “Team Chapek”.

On that note, my monthly Medium Shift opinion column —“Disney’s New Boss Sounds a Lot Like the Old Boss” — went live yesterday. It dove into CEO Robert Iger’s post-linear vision for Disney and how it is structurally similar to that of his predecessor and successor Bob Chapek. But, it is limited by Iger being bearish where Chapek was bullish on data-drive, consumer-first models.

The past two essays — “The Doom Loop of the Mogul” and “It’s Complicated” — have highlighted how the media marketplace finds itself at a crossroads. To summarize:

• Maybe no legacy media companies have thrown in the towel on owning the consumer relationship. Instead, we are seeing that no one understands the media business they manage anymore. 
• The strikes have revealed that the media business model in the streaming era is not simply inefficient, as the Curse of the Mogul suggests, but that it is a bad business model on its own. 

A reader, Jason Barkham, responded:

“In the spirit of ‘yes and’ there's also the question that you raise of whether the owners are being properly represented here. Are the boards doing their job of ensuring that they have a leadership team that can play the best hand for shareholders?”

His point reflects how there is now a weird dance between media companies and Wall Street. Partly this is because Wall Street’s expectations for media companies have become weird. Somewhere between management, the board of directors and Wall Street, the basics of the story have gotten lost and there is no single party to blame. There is another loop dynamic at play, though not necessarily a “doom loop”:

• Shareholders have not actively sought to elect boards of directors with more relevant skillsets (and activists rarely do), 
• Existing boards of directors have not ensured there are leadership teams in place that can play the best hand for shareholders, and
• Leadership teams are not incentivized to pursue business strategies that require their replacement with managers possessing more relevant skills.

From a Wall Street perspective, there is nothing unusual about this loop dynamic in public markets. It happens often. But, for media this is the market moment where the wholesale media model is transitioning to a retail model. New technology is reshaping both the media that people consume and the business model itself. Changes to the strategic, financial and operational constraints of the business are required.

The growing question is where and how a catalyst for change will emerge through this "loop dynamic".

Key Takeaway

Media businesses may be impossible to change until shareholders, board directors and management agree that favoring EBITDA and Enterprise Value over a simplified corporate focus is a mistake in this marketplace.

Total words: 1,800

Total time reading: 7 minutes