Happy Monday War & Peaceniks!
I’m kicking post-game Monday by sending you an early Valentine - a brand new Map of The Media Universe, incorporating all the twists and turns thus far this earnings season…
The first quarter has generally treated the planets on the map well, despite major headwinds and some truly disappointing numbers in earnings reports in Media and Tech.
Nearly all the major players on the map grew in value - most especially Meta, whose valuation has grown 34% since Zuckerberg’s earnings call full of spin and vinegar. Amazon has grown back back into a Trillion-dollar Death Star, and Microsoft has once again crossed the $2 Trillion threshold.
Netflix has regained a big chunk of the valuation they lost last year, despite numbers that helped their CEO see the exit.
Once again, I urge you to keep an eye on NVIDIA, whose market cap is now over half-a-tril, and who I still believe will be the next Big Tech Trillion Dollar Death Star.
But perhaps, on Super Bowl Monday, the region to zoom in and cover most closely this year might be the Sports Leagues. All the players in the Sports Zone have signed lucrative deals in the last year, and it’s showing up in their box scores. The major leagues on this map grew in valuation an average of 20% in the last year, and with sports rights ever more in demand by the big gatekeepers, it does not seem that growth can be stopped.
There’s still plenty of spin left to be spun this earnings season - with Paramount, Roku and Disco Brothers yet to come. So I’ll save my full analysis, and reserve my right to revise the darned map again this month.
But, if there’s a big takeaway from earnings season so far, it’s that companies on the map with diversified revenue models are better able to shrug off difficulties, and better prepared for what 2023 may have in its app store.
Meta spun lousy numbers like a circus performer with a dozen plates. But they’re’ll be nowhere left to spin if the ad business doesn’t bounce back, soon.
Netflix spun falling revenues and income as good news, pointing to their new ad platform. Which has less than 2 million subscribers. If users don’t start, y’know, using that platform, or if the impression recession keeps stomping on unabated, Netflix doesn’t have any other levers to pull - they are just, and only, a TV company now.
Meanwhile, Apple, Google, Microsoft, Disney and Amazon also all announced some troubling results - yet they also all had some digits to share, which offset their headwinds.
Amazon killed it on their Cloud and with their Ads. Apple had their worst performance since 2016, and YET… their Services business showed strong growth. Even while Disney lost $1 billion on streaming, their Parks department had 32% growth and $3 billion in net income - lifting up Disney’s enterprise revenue net income 11%. Google had great Cloud numbers, which lifted the whole enterprise. Microsoft had big growth in their B2B, Cloud and Social Media businesses. In each case, these companies faced the same headwinds as their direct competition. For each, growth in one or more of their business lines offset losses in others.
Then there’s The NY Times.
“It was our second-best year for net digital subscriber additions, behind only 2020. Importantly, we saw more proof that there is strong demand for a bundle of our news and lifestyle products.’”
With revenues up 11% and paid subscribers up 1 million YoY, now at nearly 10 million, The Old Gray Lady looks less gray than most in Media this earnings season. That’s because “the paper of record” is now “the super app of record,” epitomizing the power of super serving an engaged customer base across many media needs, inside an ecosystem with a diverse set of revenue levers.
The NY Times: One of the best News offerings on earth. A Top 5 Podcast Publisher. An exploding Gaming platform. A huge new Sports vertical. A well-balanced revenue flywheel of ads, subscriptions and pay as you go. The Times is THE epitome of how legacy Media (in this case the most legacy of all) can and MUST reimagine itself for the new era of Media.
In a Maslow’s Hierarchy of Feeds, The NY Times scratches many itches for a devoted, and very lucrative, audience. Which is why they continue to grow while nearly all their competition are laying off staff and hiring ChatGPT to replace them.
This earnings season has strongly reinforced my belief that the next phase of the Media Universe will a Battle of Lifestyle Bundles and a fight for Supreme Super App. This sent me back to revise my Bundle Battle score card.
I didn’t add The Times, as their scale doesn’t measure up to the major media players (yet). But, at the suggestion of an avid reader, I did make room on the scorecard for Shopping. Amazon’s commerce platform - once considered its core business - actually had a terrible year, losing billions on investments in commerce infrastructure that morphed into money pits once the hyper-demand of lockdown abated.
Yet, free delivery for Shopping is a key significant other making their lifestyle Prime bundle all-but churn-proof. Shopping also makes Amazon’s ad platform an absolute must-buy. In 2022, Amazon sold $37 billion in ads - more than 3X TikTok. Last year, Amazon’s cloud business, AWS, generated $80 billion in revenue - Netflix’s entire business generated $31 billion.
So, as I wallow in the loss of the Philadelphia Eagles, I hope you enjoy this early Valentine card and map combo.
THIS WEDNESDAY AT 2P PT/5P ET I’LL BE HOLDING MY MONTHLY WEBINAR FOR PREMIUM PEACENIKS - DETAILS ARE BELOW MY SUPER BOWL PIC. I’ll cover earnings season and handicap what’s coming, and also answer questions about our massive Sports content study we released last week.
If you see the deets below the pic, thanks for being a paying sub!!! If you don’t, consider trying the FREE TRIAL and joining the cheering (or jeering) crowds in our zoom stands!
ESHAP
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