📺🎥 Why are Legacy Media Companies Failing ? 🎯📈 👀

Hello,

Following a week-long hiatus, I am back with the latest edition of Leeds1888. The 35th edition of the IMAX issue garnered immense attention and became one of the most widely read releases in the history of Leeds1888. Perhaps this popularity can be attributed to the Oppenheimer effect, or maybe it was the captivating and investigative essence of the article itself. Regardless of the underlying reason, numerous readers expressed their positive sentiments and provided appreciative feedback about the piece. I am truly thankful for this response.

By the way, for those reading the newsletter for the first time, I cover significant events and provide valuable insights from the world of media and entertainment.

The Highlights of this week's issue

• Top OTT Shows & Movies (don’t miss the surprise entrant)

• Why are Legacy Media Companies failing?

• Weekly Box Office figures.

• News Buzz

Top OTT Shows this week

Top Movie releases this week

Why are Legacy Media Companies failing to create value for its shareholders?

Amid the resounding triumphs of cinematic gems like Oppenheimer, Barbie, Marion Bros, and SpiderMan- across the Spider Verse, digesting the current headline, "The Struggle of Legacy Media Enterprises to Sustain Growth," might pose a challenge. Yet, this is the reality.

In the year 2023, industry giants including Disney, Warner Bros. Discovery, Paramount Global, and Fox have all encountered substantial setbacks.

The legacy media sector finds itself in a phase of contraction, exacerbated by the Hollywood writers' strike, even as Netflix- The new age media company makes a resilient comeback.

Given the absence of a coherent growth strategy, the prospects of a swift recovery for these legacy media behemoths remain uncertain.

Before getting into the details further, let's establish a comprehensive understanding of what constitutes a Legacy Media Company. 

According to information gleaned from Wikipedia, Legacy Media Companies represent the prominent mass media establishments that held sway prior to the advent of the Information Age. This primarily encompassed domains like print media, film studios, music studios, advertising agencies, radio broadcasting, and television.

In the context of this article, our focus is directed towards Legacy Media Companies within the realm of the Film and Entertainment sector like Warner Bros, Walt Disney, Comcast, Fox Studios etc.

In sharp contrast, emerging as counterparts are the New Media Companies, characterised by their reliance on digital technologies for content production and distribution. Noteworthy examples include entities such as Netflix or Amazon Prime, emblematic of the modern digital age.

With this groundwork laid, let us now look at the pivotal factors underpinning the struggles of these legacy media companies. However, prior to this exploration, it's imperative to gauge the seriousness of the situation at hand.

Walt Disney Inc.

• Since his re-assumption of leadership at the close of the preceding year, Disney's Chief Executive Officer Bob Iger has encountered a tumultuous journey.

• A recent development saw Disney completing the layoff of 7,000 employees.

• Last week witnessed the resignation of Chief Financial Officer Christine McCarthy.

• As a cost-saving measure, the company is discontinuing content from it’s streaming services.

• Experiencing a substantial setback, its animation business is currently mired in a significant slump. This is evident from the performance of its latest Pixar film, "Elemental," which recorded the lowest opening weekend revenue for the studio since the premiere of the original "Toy Story" in 1995.

• Over the course of the past five months, the company's shares have grappled with challenges.

Warner Bros.

• Warner Bros. Discovery is laying off more employees after cutting thousands of jobs last year as it tries to boost free cash flow.

• The company’s movie, cable and streaming businesses, DC Studios’ co-chief James Gunn and David Zaslav both trumpeted “The Flash” as one of the greatest superhero movies ever made, but the film flamed out at the box office amid mediocre reviews.

Comparable narratives emerge from other industry giants like Paramount, Fox, and Comcast. This underscores that the issue is systemic rather than limited to individual companies.

Causes of Decline and Shortcomings:

1. Shifting Audience Desires and Innovation Gap: Legendary legacy franchises and characters, like Disney, Marvel, and Pixar, have captivated us for years. However, the modern digitally connected audience seeks fresh content like Quid Games & Soulcatcher. Reimagined legacy content or innovative approaches like "Spider-Man: Across the Spider-Verse" draw larger crowds, while traditional Pixar-style animations and DC superhero films like "Flash" struggle to excite at the box office.

2. Misaligned Streaming Investments: Legacy media companies rushed to create their own streaming platforms or acquire them during the 2020-21 Covid surge in online viewership. Despite efforts, they lack the vision, technical prowess, and content diversity of digital-first streamers like Amazon Prime or Netflix. This has resulted in significant financial losses, prompting consolidation, sales, or rebranding of their platforms to optimise costs.

3. Labour Strikes and Industry Changes: The rise of streaming platforms disrupted established rules and wages in the industry, leading to strikes like the ongoing WGA/SAG-Aftra strike. This 100-day standoff has halted content production in affected areas like the USA and Canada. Streaming platforms, distributing content globally, remain less affected by these disruptions compared to legacy media companies.

The graph above highlights the declining view time, outlining the challenges traditional media companies confront.

Conclusion

Legacy Media Companies have consistently grasped audience preferences, crafting globally acclaimed content. To thrive, adaptation is crucial. Agility in operations, a global mindset for diverse content, and proactive tech adoption with a digital-first approach are imperative for these companies to remain pertinent and resilient.

Box Office Collection Report

News Buzz

• Spotify expands its AI-powered DJ feature globally-Spotify is rolling out its AI-driven "DJ" feature to numerous global markets, following its initial launch in North America six months ago. Accessible within the "music" feed section of the Spotify mobile app, this DJ feature customises users' listening experiences by offering a curated selection of music accompanied by spoken-word commentary generated by a synthetic voice. Read More

• William Friedkin, director of ‘The Exorcist’ and ‘The French Connection,’ dies at 87- Friedkin was synonymous with the New Hollywood era of the late 1960s and ’70s, when risk-taking young filmmakers wrested creative control from studio suits and shook up the system. He was known for injecting familiar genres with live-wire energy and edge. Read More

With that it’s a wrap !

Keep reading & spreading the knowledge ,

Vipul