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 is on the theme, "Linear channels seem doomed. What happens next?"

The Twitter story has played out as a funhouse mirror on the media industry, perhaps in part because it is a media company in certain ways. Meaning, applying Twitter as a mirror on happenings at other companies may unfairly amplify or downplay what is going on within those companies, but the exercise also may reveal some hard truths.

This thought was inspired by this line in Twitter founder Jack Dorsey’s apology tweet to Twitter staffers: “I own the responsibility for why everyone is in this situation: I grew the company size too quickly.” It’s a concession of “bloat” at Twitter — the excessive number of employees and inefficient corporate bureaucracy (“2500 coders doing at least 100 lines per month” that emerged in discovery for the Twitter v. Musk case) that companies take on for reasons both intentional and unintentional over the years. It’s a point reinforced by new owner Elon Musk tearing apart Twitter’s corporate structure and software code in order to build a new product, laying off 50% of workers. 

The thought also was inspired by the comical back-and-forth between Musk and the advertising community, who are seeking the types of guarantees for brand safety that legacy media companies have long guaranteed, even in the face of digital disruption.

Both suggest that Twitter “needed” its bloat to keep investors happy (7,500 employees and $5B in annual expenses supporting $5B in annual revenues), and it “needed” a brand safety story to keep large advertisers happy (who spent very little of their budgets on Twitter, but made up 85% of Twitter’s advertising revenue as of 2020). However, neither drove growth, and the business was unable to evolve because it was constrained by this bloat (NOTE: Dorsey also was constrained by his decision to be CEO of two public companies).

Applying the Twitter funhouse mirror to Q3 2022 media earnings, a provocative question emerges: Is any publicly-owned legacy media company positioned to evolve?

Key Takeaway

The Twitter funhouse mirror tells us that public markets implicitly believe legacy media businesses may be better off going private or becoming subsidiaries of much larger companies

Total words: 1,800

Total time reading: 7 minutes