Good morning.

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".

“‘The Curse of the Mogul’ argues that the poor performance of the media industry is the responsibility of media management’s stubborn refusal to accept the economics of basic business strategy.” 

The quote, above, was written in 2011 as a postscript to the 2009 book of the same name. To date, I have used “The Curse of the Mogul” to highlight when legacy media CEOs may be pursuing creative businesses that they believe are not subject to traditional strategic, financial or management appraisals. As a consequence, media companies may reward content creators at the expense of shareholder value.

Back in May’s “Writers, Franchise Fatigue & YouTube's NewFronts”, I highlighted how the complaints of the Writers Guild of America (WGA) — just prior to their strike — reflected the Curse of the Mogul. Showrunners like Taylor Sheridan (“Yellowstone”), Shonda Rhimes and Ryan Murphy had benefited unusually from the “Peak TV” era with nine-figure deals. But it was not universally true: “many of the people who wrote the series that created TV’s latest Golden Age were seeing their remunerative gold turn into silver”, as Mary McNamara of The Los Angeles Times observed. I argued this was a noteworthy disconnect.

There is a long, complicated set of disconnects between the two sides of Hollywood's strikes — on one side, the Alliance of Motion Picture and Television Producers (AMPTP), and on the other, its striking counterparts The Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA) and the WGA.  These disconnects are more significant than many may realize: They reveal how two core assumptions of the Curse of the Mogul are now blown up. 

First, the strikes have revealed that the media business model in the streaming era is not simply inefficient, as the Curse of the Mogul suggest, but that it is a bad business model. Neither creative talent nor media shareholders are reaping value despite growing spend (total media industry content spend of $134.6 billion in 2022, and a 25% jump from $89.9 billion in 2020 to $118.4 billion in 2021) and growing distribution. 

Second, the Curse of the Mogul argued that creators benefit from media’s inefficiencies, but the strikes are highlighting how streaming economics are inefficient for both creators and media companies.

Key Takeaway

The Hollywood strikes have revealed how the economics of legacy media streaming efforts have left media "moguls" and shareholders stuck in a “doom loop”.

Total words: 1,600

Total time reading: 6 minutes