The Year Of Living Dangerously

2022 Changed Everything

Happy Friday War & Peaceniks! Welcome to the beginning of the end… of 2022.

This is the year Netflix fell to earth and took all premium streaming with it. In 2022, Meta and Social Media plummeted even further, pushed off a cliff by Apple. This is the year the Gaming sector realized it didn’t have unlimited lives, and Microsoft attempted to become the top player (Activision acquisition tbd). 2022 was also a wake-up call for big tech excess, perhaps epitomized by Amazon, but felt by everyone on the map.

The recent slate of 3Q earnings reports from the major players shows the continued relevancy of Media’s one great truism, four decades after William Goldman wrote it:

Nobody knows anything.

If you need evidence for this, please, I implore you, read those earnings reports for the major media companies. They are not dense documents. They are chock full of indications from Media’s elite that much of what’s happened this year took them entirely by surprise; and a slew of tells that they don’t have much idea of what’s coming in 2023.

One big thing we DID learn in 3Q: We ARE in an advertising recession (aka Impression Recession) - with nearly all major ad outlets reporting disappointing numbers or offering disappointing projections.

Another big lesson from 3Q & 2022: After years of rewarding unlimited investment, in search of SCALE and GROWTH, Wall Street now wants to see belts tightened and profits made. This brand new 2022 point of view has picked up urgency in all sectors as economic headwinds have started blowing harder.

The Problem With That: Cutting costs is not a strategy. Indiscriminately slashing overhead, as you enter a recession, in the most competitive media ecosystem in the history of media ecosystems, is a great way to lose ground, lose talent, and wind up getting acquired.

With that ground work laid, here are some big takeaways from the YTD and some projections for the last stretch of this nutty year: