Bob Iger, CEO of The Walt Disney Company, resigns. David Zaslav, CEO and President, Warner Bros. Discovery, Center. Bob Bakish, President and CEO of Paramount Global.
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Companies and industries have their ups and downs. The legacy media industry is in a trough.
The first half of 2023 has been a disappointing year for media executives who hoped this year would be a recovery from a dismal 2022, when media valuations plummeted due to sluggish streaming subscribers. Netflix, disney, warner bros discovery and Paramount Global about half.
Instead, investors are once again excited about Netflix’s promise to crack down on password sharing and potentially lead to tens of millions of new signups. Netflix stock has soared over the past five months, surpassing the S&P 500.
Legacy players, on the other hand, cannot get out of their own way.
A comparison of Netflix and the S&P 500 over the last five months.
“When it rains, it pours,” said Rich Greenfield, a media analyst at Lightshed. “The situation is only going from bad to worse.”
It’s been a bumpy road since Disney CEO Bob Iger returned to the top of the company late last year. disney finished recently lay off 7,000 employees. Chief Financial Officer Christine McCarthy resigned last week.the company is pull programming Save money from streaming services. The company’s animation business is in a big rut, and the latest Pixar movie “Elemental” Worst weekend opening gross It’s been like this movie for the studio since the original “Toy Story” premiered in 1995. The stock has struggled for the past five months.
Comparison of Disney and S&P 500 over the last 5 months.
Warner Bros. Discovery vs. S&P 500 over the last 5 months.
Paramount Global It cut its dividend last quarter after streaming losses peaked this year and a downturn in the advertising market hurt its terminally ill cable network business. Wells Fargo said in an analyst note on Friday that the company’s bull case and bear case were one and the same: selling parts. Warren Buffett, perhaps the most acclaimed investor in history, said: CNBC about Paramount’s streaming service “Fundamentally, it’s not that good of a business.”
Comparison of Paramount Global and S&P 500 over the last 5 months.
Comparison of Fox Corporation and S&P 500 over the last five months.
NBCUniversal weathered the storm well, protected by its parent company. comcast, earns revenue from cable and wireless assets. It also takes advantage of the aforementioned failure. MSNBC #1 cable news network This month, for the first time in 120 weeks, it was ousted from Fox News amid coverage of the federal indictment of former President Donald Trump. Universal’s “Super Mario Bros. Movie” Biggest box office hit so far this yearand yet the stock price has not moved much.
Comcast versus S&P 500 over the last five months.
All of this is happening with the long-running strike of Hollywood writers in the background with no end in sight. Writers know that the longer the strike goes on, the more pain it will inflict on media companies, eventually depleting the scripted content that has already been created.Recent Zaslav gave a speech at the opening ceremony went to Boston University, drowned out by booing And the slogan “Pay the writer”.
This week may bring even worse news. Film and TV actors will join the writers’ strike if they don’t reach an agreement with Hollywood studios by Friday.
Greenfield said YouTube, TikTok and Netflix are likely to benefit from Hollywood’s shutdown, as they continue to churn out international content unaffected by the strike.
If ad placements plummet as the 2024 U.S. presidential election heats up, traditional media might get some respite. But the evidence that investors reward media companies simply for cutting costs is still scant. Consolidation prospects as legacy media currently lacks a strong growth story and regulators block media-related deals such as Microsoft’s acquisition of Activision and Penguin Random House’s proposed acquisition of Simon & Schuster is opaque.
The industry just wrapped up its annual advertising festival in Cannes, France. Traditional media executives were still spending company money on yacht trips and drinking rosé. The background was still beautiful.
But the scenery is dark.
Disclosure: Comcast owns CNBC’s parent company, NBCUniversal.
Watch: WPP CEO Mark Read on the State of the Ad Market (From Cannes Lions 2023)
