With news from the media/tech landscape flooding your inboxes daily, the VIP+ team stands ready to sift through the biggest stories of each week and share their insights in a rousing discussion every Friday on LinkedIn Live at 11:30 a.m. PT / 2:30 p.m. ET.
Agree — or disagree — with our picks? Want to make some of your own? Join us each livestream, and of course, replay our last session in its entirety.
Below are our analysts’ takes on some of the events over the week that was.
Heidi Chung, Media Analyst/Correspondent
All good things must come to an end eventually. At least they did for Disney during its latest quarter.
After the pandemic boosted growth of its darling streamer Disney+, things slowed down pretty meaningfully in the first few months of 2021, and that sent the stock falling as much as 5% in the after-hours session Thursday. Maybe it’s sticker shock, but for some reason many viewed Disney as invincible to the outside pressures of competition and the macroeconomic backdrop.
Well, even Disney flops sometimes. All in all, it wasn’t the worst quarter, and there’s a lot to look forward to in the second half of the year and heading into 2022. First, theme parks are finally opening, and by next quarter Disney’s cash cow will come raging back. Second, content production is ramping up, and all of the film and show releases that had been pushed back will likely have a positive impact.
So while Q2 was worse than expected, it’s probably not a sign of real trouble ahead. But that means Disney will have to fire on all cylinders next earnings season if it wants its stock to head back toward record highs.
Kevin Tran, Media Analyst
BuzzFeed is looking to acquire millennial-targeted lifestyle publisher Complex Networks as part of its bigger plan to go public via special purpose acquisition company (SPAC) 890 Fifth Avenue Partners, The Information reported earlier this week.
Jonah Peretti has been interested in merging with digital media rivals for years. Added scale not only helps BuzzFeed become more attractive to brands but potentially gain leverage in discussions with tech platforms that want to distribute content in products like an Instant Articles or Apple News+.
It would also make sense for BuzzFeed and Complex to live under one roof given both companies appeal to similar demographics. The former company currently claims to have the number one millennial publisher reach. The latter reports 40% of its readers being in the 25-34 demographic and 18% being 18-24. It could be simple to have, say, BuzzFeed digital video series (like “Worth It”) promote certain related Complex shows (like “Hot Ones”) at the end of episodes and vice versa.
Growing the reach of these digital video series would then create great opportunities for e-commerce revenue, which both companies are increasingly prioritizing to be less vulnerable to ad market changes.
Andrew Wallenstein, Chief Media Analyst
The unexpected sale of digital comedy brand Funny or Die to investor Henry R. Muñoz can’t be the exit Sequoia Capital saw for itself when the venture-capital firm teamed with CAA to hatch the company 14 years ago.
Since then, various owners have come and gone, but the original dream of making Funny or Die a brand that could capitalize on the incredible heat other original investors Will Ferrell, Judd Apatow and Adam McKay helped generate out of the gate with their creative vision has remained elusive. Funny or Die has been less resonant as a full-fledged consumer brand in recent years, essentially transitioning into more of a production company than anything else.
Now Muñoz comes along and floats the notion that he can convert Funny or Die into an independent studio capable of financing its own projects. It’s a good sign that current management is staying on to see that vision along, but it’s hard to shake the feeling that wherever Funny or Die ends up, it won’t be in a way that will fully capture the potential this brand once had.
Doesn’t mean plan B isn’t worth pursuing, too, but the departure of the last original investor in Sequoia is good enough a time to wonder what might have been.
Gavin Bridge, Senior Media Analyst
The conflict between Nielsen and the TV networks regarding Nielsen’s undercounting of TV viewers during the pandemic rumbles on. The independent Media Rating Council (MRC) found this week that the key 18-49 demo was likely undercounted by between 2% and 6% in February 2021.
There are two ways to look at this. The micro view, held by the TV industry, is that this is outrageous and has cost them advertising money, as it projects that audiences are worse than they are. This is fair, with the Video Advertising Bureau, which represents the networks, estimating that in February alone this could have cost networks between $78 million and $234 million in revenue.
The macro view is this argument is an escapade in existential nihilism. If ratings for February are boosted by the 2%-6% they’re estimated to be missing, it will make no difference to the overall trend that live TV viewership is declining, as fewer and fewer people report having pay TV every quarter — unless this, too, is somehow undercounted.
Raising the issue because money is on the line is fine, but the argument has sometimes been framed as “this means TV declines aren’t as bad as they have been reported.” If the margin of undercount is in the low single digits, it won’t stop the trend that linear TV keeps losing ground to streaming on-demand (and linear FAST) alternatives.