Holy shit is it coming.
Enjoy the Holidays, my media friends, because you are in for a shitstorm of cuts in 2014.
It will not be pretty.
It seems that media company CEOs are hell bent on proving to Wall Street that their companies can be growth companies.
Unless they fire every employee and start a new company by themselves in a garage, they cannot be growth companies the way Wall Street would like.
20% margins just will never happen again in the movie, TV, print, music industries – so deal with it.
But these CEOs are guys (all guys) who think they can do anything.
But they will fail.
And then they’ll cut.
And… it will not be pretty.
Tribune got things started.
No one will make it through unscathed.
First to go will be the packaged media folks. Those who support the production and distribution of DVDs and CDs and magazines, etc.
Slates will be slashed, storytelling risk-taking will cease to exist. Since no one can seem to do comedy anymore on Broadcast, they will be relegated to the epic mini-series format like “Under The Dome” and live Sports to stay afloat.
Then, finally, the low margin businesses will be hit – like console games. With the exception of a few huge titles, it’s a tough business and it certainly doesn’t help these overly-ambitious / delusional CEOs hit their targets.
So what’s going to be left? TV production for cable and over-the-top. Why TV gets ownership over Internet content production is baffling to me. But they do.
By the end of 2014, giant media companies with their film studios, broadcast networks and massive real estate leases will be much much leaner and the quality of the product will be much much worse.
Hey, but a point of margin here and a point of margin there adds up to… 2 points.
Auld Lang Freakin’ Syne.
Jill Kennedy – OnMedea