To remind you, 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."

There’s a quote from AMC Networks James Dolan that I have been using repeatedly since February. To summarize it, in February he told investors that the direct-to-consumer business model requires a “culture change” away from the longstanding wholesale model—which isolates the producer from the consumer—and toward “understanding the customer and serving them well.” 

Until recently, I had believed he was explaining AMC’s struggles to scale in streaming — its suite of apps has struggled to grow in recent fiscal quarters — and how AMC would go about solving that specific problem. But now I believe he was making a broader point that in the retail model, the customer may want or need more than just streaming from AMC Networks. In other words, if in the wholesale model the consumer wanted TV, in the retail model the consumer's needs are far more multivariable and complicated than launching a streaming service.

Notably, he didn’t use Disney CEO Robert Iger’s phrase "core brands and franchises", or former WarnerMedia CEO Jason Kilar’s “beloved characters and worlds”. But he was making a related point: marketing to the modern media consumer in the retail model has more in common with Cablevision’s cable-TV distribution business than AMC’s linear networks business (the former is focused on the consumer, the latter licenses distribution of its networks to reach those consumers). 

It is an important comparison: 65% of its 3.1 million cable customers at the time of its 2015 sale to Altice were subscribed to triple-play services (cable + broadband + landline telephone). That is bundling, but a bundle model that has more in common with The New York Times (NYT) bundles of digital products than it does with Disney’s bundle of streaming apps Disney+, ESPN+ and Hulu.

Key Takeaway

The New York Times bundling strategy was recently explained by the Publisher of The Athletic with a diagram of a daisy. New AMC Networks management are promising investors a similar "daisy" bundling strategy, and that is a surprising signal in the noise of the media marketplace.

Total words: 1,600

Total time reading: 6 minutes