THE HEART OF WAR

The Great Media War is Here

Happy Monday Peaceniks. Ready for War?

Fun fact: In the last twelve months YouTube - the smallest business segment of Alphabet - has out-earned the entirety of Warner Bros. Discovery by more than $10 billion.

There’s a major lesson in this datapoint. To better understand what that is, let’s take a look at the latest Media Universe Map which dropped on Friday.

When I first published these maps four and a half years ago, the intention was not to predict anything, it was to announce what had already happened: Big Tech’s takeover of Media. When you study the latest version above, you can see this has only gotten truer since.

If, however, you do want to look at these maps for predictions, then you need to zoom out for a sense of the gravitational pull of the massive Big Tech planets on the outer ring. You can almost feel them siphoning all the oxygen out of the system. The struggle of the smaller spheres to stay afloat is palpable.

Five years ago, the entertainment industry declared the start of The Streaming Wars: A battle between the major Media players for supremacy on smart TVs. In 2022, the entire traditional entertainment community entered a dizzying tailspin. And this year, the Media intelligentsia has unanimously announced Netflix as Streaming Wars victor - champion of a business that they started and no one else has mastered.

And so, the Streaming Wars has come to an ignominious end. Yet, strangely, the thought leaders of Media’s chattering class have failed to provide accurate or adequate nomenclature for the far bigger battle to come.

The Streaming Wars were only a minor, opening skirmish in a much larger and more prolonged clash: Not a fight between Media companies for ownership of the TV, but rather a conflict between Big Media and Big Tech for control of the world’s pockets, wallets, homes, and hearts.

The Great Media War started long before the Streaming Wars. Its spoils will be much more valuable. And the winners will almost certainly not come from Hollywood.

This larger conflict has been waging beneath our screens, in the very operating system of our information-entertainment biosphere, ever since last century when the first smartphones dropped. To understand where the state of war stands today, you really must zoom out from day-to-day reporting on the front and take in the entire global battlefield from thirty-thousand feet.

The way I do this is reading and digesting the earnings of all the major combatants, each quarter. We are right in the heat of the 3Q 2024 earnings, so let’s zoom out.