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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" and "There is a less-discussed lens on how the demand for 'premium content' is being redefined by creators, tech companies and 10 million emerging advertisers."

Netflix has set the market standard for the Total Addressable Market (TAM) for streaming or really any media company: 190 countries not including China, Crimea, North Korea, Russia or Syria. Netflix CFO Spencer Neumann told last year’s Morgan Stanley’s Technology, Media & Telecom Conference that they envision the TAM in household terms as 700 million pay-TV households and 1 billion broadband households outside of China. 

Back in 2021, Warner Bros. Discovery CEO David Zaslav believed the merger of WarnerMedia and Discovery could eventually attract 400 million streaming video subscribers worldwide. Disney projected 300 to 350 million subscribers by 2024 across Disney+, Hulu and ESPN+ in its Disney Investor Day in 2020. Fast forward to today, neither Warner Bros. Discovery’s nor Disney’s projections hold up. 

Previous Disney CEO Bob Chapek was ousted last November in part because management disagreed with his projections for Disney streaming of a less ambitious outcome of between 230 million and 260 million subscribers by September 2024. Now, 10 months later, his predecessor and successor Bob Iger told investors that they have pared back their Netflix-like international ambitions:

“[T]here are some markets that we will invest less in local programming but still maintain the service. There are some markets that we may not have a service at all. And there are others that we'll consider, I'll call it, high-potential markets where we'll invest nicely for local programming, marketing and basically full-service content in those markets.”

Warner Bros. Discovery has lost nearly 2 million subscribers since the relaunch and rebranding of HBO Max to Max back in May, and management has also pulled back on international expansion plans. So, the logical question is, how did the wholesale legacy media guys get the TAM for a retail media business like streaming so wrong?

Key Takeaway

The wholesale guys did not get TAM wrong, they simply have not and continue not to invest in what the new medium of the Internet requires them to master in order to grow. 

Total words: 2,100

Total time reading: 8 minutes