Good morning!

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."

Author's note: I added a correction to last Thursday's "Is Hulu Worth $40 Billion To Disney? To Anyone?" A valuation of $40 billion would create $12 billion in additional value to Hulu. But, because Comcast owns 33%, the additional cost to Disney would be only $4 billion, making the total sum paid to Comcast around $13 billion. The essay originally estimated an additional $12 billion owed to Hulu. The essay has been updated to clarify that.

The argument remains true that any valuation of Hulu above $27.5 billion increases the burden upon and risks to Disney to find ways to grow the business beyond its 48 million subscribers. My original version had lumped those two points together. I apologize for the error.

It would be a stretch to say this was the week when legacy media began its move away from streaming. But, if a historian were to look back on the past week of headlines, this is what they would see:

• “Paramount Streaming Reorg: Chief Product Officer Rob Gelick Out As Streamer Merges Units” (Deadline)
• “Amazon will now let you access Crunchyroll’s anime library right from Prime Video” (The Verge)
• “Streaming cancellations hit new high” (Bloomberg)

There is an obvious theme: The business model of streaming is getting more difficult for everyone in the marketplace, including Crunchyroll for whom streaming is one amongst a portfolio of services for hardcore fans of anime and manga. But, as Netflix’s strong Q3 earnings report reflected, it is not complicated for everyone.

The question now is whether these bearish trends will continue. There are good reasons they will, in large part because of the production delays that have resulted from the SAG-AFTRA actors’ strike and the Writer’s Guild of America strike. Streaming requires a constant supply of new productions and promotion of those productions. The strikes have limited the former and shut off the latter.

Legacy media streamers seem to be limping into January 2024, and not growing. Something has got to give. This may have been the week when some legacy media companies began their pivot away from streaming and towards licensing models.

Key Takeaway

If media companies can neither scale their streaming offerings nor contribute their entire libraries to another service, then what other choices do they have for generating cash flow? Crunchyroll has one answer.

Total words: 900

Total time reading: 4 minutes