Happy Hot Wing Hangover Day War & Peaceniks!
If you follow this space at all (and how dare you not!), you’ll know how much I believe that a Diverse Business Model is the key to competing, thriving, and surviving in the Media Wars.
There are many factors for this:
With unlimited choices for their attention, consumers are increasing eager for media options with varying payment options. Ad-free subscriptions have been on the rise for years - and now consumes the majority of American entertainment time.
BUT… after years of the pay to play mode of Netflix, Free is to enjoy is making a huge comeback - especially with Millennial Parents and Gen Z consumers.
So companies who rely too heavily on Ads (Google, Meta), OR too heavily on Subscription (Netflix, Spotify) may soon find themselves scrambling to swing the other way.
Secondly, to compete in the Media Wars, over the long haul, combatants for attention, will want/need to keep their audiences “on platform” as long as possible - not only for the revenue that stickiness generates, but in order to promote what they are selling. With ad space both diminishing (see first chart) and ignored (other than the Super Bowl, who of you really looks at ads on any platform?), on-platform marketing is going to be the key to gathering audiences, for anything.
Lastly, and most importantly, with Trillion-Dollar Death Stars battling for the time, money and attention of increasingly diverse and fragmented consumers, to have any hope of staying in the running, Media Warriors will need to weather twists and turns of the modern media economy, endure the pendulum swing of ever-more fickle audiences daunted by the paradox of choice, and zag while the rest of the market zigs.
Example: Amazon’s ad business is just 11% of their earnings, but it’s more than Netflix’ entire 2021 revenues and nearly equal to all of Comcast’s 2021 profits.
Meta can tout its VR face-obscurer all it wants. They’re still a 98% ad-driven business. Which is why they’ve lost hundreds of billions in value since announcing a slowdown in Facebook users.
But while I oft hammer away on revenue diversity, it is not the only factor on which I grade the prospects of media companies for the decade ahead. When contemplating the strengths of businesses battling for share of mind and share of wallet, I use six criteria to determine their likelihood of survival and success.
This is my Media Wars Scorecard:
The Six Criteria are:
Utility: Do they have a platform that consumers use daily, without even thinking about it?
Value: Does this company offer more value to their customers than they ask in return?
Superfans: Does this business engender love… do they have a cult?
Gen Y, Z & A: Does this business cater to Millennial Parents, Gen Z consumers and Gen A users; AND how well do they attract, manage, and retain Gen Z employees?
Diverse Model: Is this a business that has numerous, evolving revenue inputs; AND is this a company that is both DIVERSE and INCLUSIVE?
Flywheel: Does this company make money in its sleep, which it disperses to the development of new businesses, tailored for the emerging and wildly different modern media economy?
On this Scorecard, I’ve graded 15 companies who represent various segments of the Media Universe. But these criteria can and should apply to any competitor in the Media Wars - or to new start-ups arriving on the scene.
Here’s how I handicapped the firms on the chart:
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