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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 is focused on in Q4 2023.

Author’s note: A reminder that my monthly Medium Shift opinion column —”Media Executives Covet Games, but Are Ill-Suited to Run Them”— went live yesterday. I wrote about how in 2023, gaming and Hollywood increasingly overlapped in the zeitgeist. Gen Alpha and Gen Z are increasingly spending as much time gaming as they are streaming. And no legacy media company is positioned to take advantage of serving those consumers across both marketplaces.

The drums are beating louder for Paramount Global to be the first legacy media conglomerate to bow out of the shift from wholesale to retail (and before April 2024). Ben Mullin of The New York Times yesterday confirmed recent rumors that Shari Redstone, President of National Amusements, “has held talks with Skydance, the media and entertainment company founded by David Ellison.” The news emerged almost a month after Liberty Media Chairman John Malone predicted “we’re going to see very serious distress in our industry by companies that didn’t leverage prudently”, and offered Paramount Global and cable network Altice as examples.

A research analyst asked me last month, “What is Shari thinking?” I think the answer is clear: The reasons for a potential sale, now, are that “a serious suitor has expressed interest” and National Amusements and Paramount are “facing some economic pressures” like the debt challenges Malone outlined. Both advertisers and creditors (who lowered Paramount’s credit rating from BBB to BBB-) are telling her that her “mountain of entertainment” strategy—a bet that CBS and Viacom assets would be more valuable than the assets being split up—has failed. There is also “an unreliable advertising market” for linear channels and the uncertain future of the theatrical distribution (National Amusements owns over 1,500 cinema theaters throughout the United States, the United Kingdom, and Latin America).

Redstone's ownership of both National Amusements and Paramount Global has reached a crossroads, and her options are now limited. The safe bet is that Skydance—one of the leading independent studios in Hollywood— is interested in owning Paramount Studios and its library of IP and franchises (“Mission Impossible”, “Indiana Jones”, “Teenage Mutant Ninja Turtles”). The least likely bet is that it is also interested in pivoting into the cable networks business and/or the streaming business. Private equity ownership of the cable networks business seems inevitable. The thorniest question is what will happen to the streaming business.

Key Takeaway

After a sale, Skydance may become an “arms dealer” for Paramount’s library. Private equity may buy and “arms dealers” for Paramount's linear cable channels and their libraries, as a growth model for additional cash. Everyone seems incentivized to shut down Paramount+.

Total words: 1,300

Total time reading: 5 minutes