In Q2 2023, PARQOR will be focusing on three trends. This essay covers "'premium content' is being redefined by creators, tech companies and 10 million emerging advertisers."

To remind you, PARQOR identifies a few key trends each fiscal quarter that reveal the most important tensions and seismic shifts in the media marketplace. Must-read stories or market developments are not always obvious from press reports or research analysis, and often require a deeper dive. PARQOR’s analysis questions established ideas and common wisdom, reassesses the moving pieces, and reveals the potential in the media marketplace in 2023.

It has been a while since I last looked at the marketplace through the lens of PARQOR’s Curse of the Mogul framework. The framework highlights instances where media company CEOs may be rewarding content creators at the expense of shareholder value.

But investors lost confidence in Paramount Global this week, driving a sales frenzy Thursday morning that left the stock price nearly 30% lower than before the earnings call. That dip primarily reflected the company’s decision to cut its dividend by 80%, so in all likelihood any shareholder who had relied on that dividend in their portfolio cut bait that day.

So, for Paramount investors opting not to sell, how will management deliver shareholder value? A Wall Street Journal piece last week highlighted how “Yellowstone” creator Taylor Sheridan writes most of Paramount Global’s hits (“1883”, “1923”), for which Paramount $500 million per year, and that has given him “the clout to dominate the big-budget productions through his network of commercial projects, pushing costs to among the highest in Hollywood.” 

This suggests Paramount CEO Bob Bakish has bet too heavily on Taylor Sheridan’s creative universe and therefore fallen into the trap of the Curse of the Mogul. In turn, Sheridan seems like he is making it extraordinarily expensive for Bakish to both pursue growth and create shareholder value in Paramount’s day-to-day business.

That is an overstatement — 77 million Paramount+ subscribers worldwide are not all "Yellowstone" fans. But, Sheridan’s spending excess is a counterintuitive narrative in the context of the writer’s strike, which began last Tuesday and is protesting how studios and streamers are sharing revenues with writers. This particular story helps to reveal three disconnects between writers, studios and audiences that aren't being discussed.

Key Takeaway

The uncomfortable question facing everyone is, if franchises from studios and streamers are ultimately a weak strategy and YouTube is trending towards taking more audience share and advertiser dollars, what is going to be left for the writers?

Total words: 1,400

Total time reading: 6 minutes