2023 Will Be Another Difficult Year for Traditional Media
Viewers and advertisers are moving to digital platforms. But there are some bright spots for legacy companies.
Rosen is the author of Medium Shift, tracking the transformations underway in the media business.
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Next year is going to be ugly for public media companies. Cord cutting has reached levels many have long anticipated—an estimated 60 million households still have cable service, down from 95 million in 2017. Another 18 million households subscribe to a virtual multichannel programming video distributor such as YouTube TV or FuboTV. But in most cases, streaming is a loss leader.
That said, I also think legacy media companies are heading into 2023 with real, shining accomplishments in direct-to-consumer video upon which they can build. All have collected big databases of subscribers and credit cards: an estimated 150 million for Disney, not including Hulu and ESPN+ subscribers; 67 million for Paramount; 53.5 million for Warner Bros. Discovery—and those are just active accounts. These companies are generating recurring revenue from these millions of credit cards, yet are still losing revenue as linear subscribers shrink. But each company has built the foundations of an asset that can monetize consumers in multiple ways, like Amazon Prime or the Apple One bundle.