‘Tis the season for 2023 predictions! Let me be amongst the first. Here are my annual 10 predictions for the worlds of media, entertainment and tech.
1. Hollywood mega deals march on.
Paramount, Warner Bros. Discovery, Universal Studios. One or more of these storied studios will be bought by significantly bigger tech-infused fish backed by hundreds of billions of dollars of cash. Amazon’s acquisition of MGM may be the first. But it certainly won’t be the last. SoCal Hollywood continues to swim northward to Silicon Valley, the home of new media. Storied franchise content is what these tech-first behemoths need. (Note: In Universal’s case, Comcast would sell to focus on its significantly higher margin and predictable “boring” broadband business — and sell its theme park piece to someone else.)
2. Streaming content budgets stabilize.
Gone, at least for now, are the days that Netflix and others continuously up their content antes. Let’s face it, $17 billion annual spends are tough to justify in a hyper-competitive market where all belts (including consumers’) tighten and churn is real. Expect all major players to spend less on volume, and more on focused impact. Evergreen, ever-reprogrammable franchise content is where it’s at (see Prediction No. 1 above). Just ask Disney — Marvel, Pixar, Star Wars, The Avengers, Disney Princesses, oh my!
3. Netflix’s new ad-supported tier won’t be the great hope and savior that the streaming leader and its investors hope it will be.
In fact, Netflix’s lower-priced tier will cannibalize more premium subs than expected and monetize less. These realities make things even more problematic for the streamer that finds its most lucrative U.S. market essentially fully saturated. It’s international growth or bust (as an independent, at least). But pricing pressures overseas are even more challenging in a world that is significantly mobile-first. As I’ve long predicted, Netflix ultimately will be bought (but it won’t be in 2023).
4. TikTok’s clock runs out (or at least slows down).
2023 is the year that geopolitical realities hit the juggernaut’s Chinese home, as both sides of “the Aisle” pressure the Feds to pull the app’s hall pass. To be clear, TikTok certainly won’t be stopped. But its growth will be slowed by regulation and political pressure on the distribution front. Relatedly, streaming music giant Spotify will see its losses continue to mount. It can’t escape its existential conundrum — i.e., the more it makes, the more it loses, thanks to its variable cost structure. No one is happy here. Neither investors, nor the artists who fuel the service.
5. Ticketmaster feels the heat, and it’s only going to get hotter.
Call it the “Taylor Effect,” as other ticketing platforms (including new Web3 ticketing) sense the opening caused by the debacle and Swiftly seize it. Maybe virtual monopolies like Ticketmaster, when operating in a vacuum, feel no need to innovate to solve basic fundamental consumer issues — like broken ticket queues, rampant fraud and massive price gouging at the hands of code-breaking resellers. But mega-stars ultimately hold the mega-power, and Taylor Swift’s fans will follow her lead to someone new. And the Feds, yet again, will help guide the way.
6. Elon Musk’s Twitter meltdown continues and his trolling of us all accelerates.
And as the once-revered tech titan of our time continues to go rogue, his increasingly manic moves fuel mass defections and leave room for new credibility-conscious social players — who invest in content moderation — to emerge. Does anyone really believe that global leaders will ever trust this platform again? OK. Maybe that one. But perhaps that’s exactly the point, and this is all part of some diabolical master plan where he tears it all up to build Twitter into something else entirely — a hub for crypto transactions (I wrote about this possibility in my last column).
7. Mark Zuckerberg’s Facebook flop continues, as his all-in Meta bet on “social VR” continues to burn tens of billions of cash ($3.6 billion in Q3 alone) (I wrote about this in a recent column).
Zuck fails to see that today’s real mass market metaverse opportunity is in the world of games. But misreading the market for social VR isn’t the sole culprit. There’s also the Feds, who will make sure that it happens. Facebook and Instagram are the antitrust police’s enemy No. 1. And wait, there’s more. Tim Cook’s Apple is yet another mega-threat. While Zuckerberg has been flailing, Cupertino has been learning. Which leads me to…
8. Apple finally enters the metaverse market with its much-anticipated “next big thing” — its new VR/AR glasses.
But unlike Zuckerberg, Cook won’t bet the farm on the metaverse and “social VR.” Instead, he will under-promise on other use cases and then massively over-deliver. Apple’s introduction of AirPods is the model here. Yes, those little white Q-tips didn’t “wow” us when first announced. But look at them now. AirPods are the most successful wearable of all time, stealthily becoming a gargantuan cash machine that continuously spits out billions and billions of cash.
9. Crypto may be crashing all around us, but NFTs will enter the mainstream to point the way to real transformational opportunities for both creators and consumers.
While most everyone conflates the two, crypto and NFTs aren’t the same. Yes, both are born out of the same Web3 blockchain blood. But NFTs can have real lasting utility and value (the real ones, that is, as I previously wrote). And they also disintermediate. Now content can bypass the middleman and go directly to the source of cash — the audience. Expect Hollywood producers to ultimately find a new source of financing, and artists to find a new way to significantly monetize (which, in turn, will fuel more art).
10. Jeff Bezos will follow Bob Iger’s lead and return to Amazon to bring back his idiosyncratic magic and investor mojo.
Both captains of industry were bored anyway. It’s much more fun to explore transformational strategic possibilities that impact virtually everyone on the planet. Bezos has already taken his Blue Origin joy ride into space. It was fun while it lasted. Now there’s work to be done.
Bonus: Speaking of Iger, one of his first stops will be Cook and his friends at Apple to explore an eventual sale of the Mouse House.
Let’s not forget that Iger served on Apple’s board until 2019, and Steve Jobs birthed Pixar — so the shared DNA is undeniable. A long shot? Of course, thanks to the Feds inevitable antitrust animus alone. And Iger just Monday dismissed that possibility as “pure speculation” in a town hall meeting (as reported by TheWrap). But Iger is both smart and charming. No good CEO shows their hand before they play it. If he and Cook eventually do agree to marry (in a deal that Wall Street would love), the duo may be able to win over the Feds by agreeing to divest Disney’s theme park division (and perhaps even more, including ABC Television and ESPN) as conditions of the deal. Hey, I gotta really put myself out there on at least one prediction. That’s all part of the fun!
So an early happy new year everyone! Much excitement awaits. Just maybe not the right kind for broken brothers-in-arms Zuckerberg and Musk.