For the last couple years, we discussed the downfall of Hollywood. During this time, we dove into the issues movie studios are having. Both film and television, for their vantage point, are in decline.

When disruption happens, established players get crushed. The establishment is destroyed with newer entrants taking over. This is the scenario playing out in the media world.

It should, therefore, come as no surprise that one of the leading entities is a technology company.

Google, with its YouTube application, has taken over video. This is something we discussed based upon the streaming numbers.

That said, there are some who are already predicting that YouTube is the king of media.

YouTube: The King of Media?

Is the demise of Disney upon us?

For the last century, one could make the case this was the dominant player in entertainment. When it came to media, the Mouse was the King.

Now, it appears the decline is well underway. YouTube has crushed Disney in the streaming wars, something that it keeps expanding upon.

This is a situation that is capturing the attention of some analysts.

As of Friday's close, the market cap of Disney was $181 billion. Keep this number in mind.

MoffettNathanson’s Michael Nathanson writes in a March 31 note that YouTube should be officially crowned the “new king of all media,” with engagement topping all other media companies in February’s Nielsen Gauge report, and with 2024 revenue of $54.2 billion, second only to Disney. And he predicts that YouTube will surpass Disney this year.

This is something that is difficult to figure. We are dealing with a subsidiary of Google. Hence, this is part of a larger operation.

That said, the high estimate for YouTube, if it was a standalone company is $550 billion.

If YouTube was a standalone business, public comps suggest the business would be worth $475 billion to $550 billion, or about 30 percent of Alphabet’s current valuation, Nathanson wrote. “YouTube has the potential to become the central aggregator for all things professional video, positioning itself to capture a share of the $85 billion consumer Pay TV market and the ~$30 billion streaming ex. Netflix market in the U.S.”

Source

If this forecast is correct, this is bad news for Disney. One of the key components is the cost of product. For much of what YouTube profits, there is minimal expense. Hence the profitability of the entity is much higher than Disney.

The End of Traditional Media Companies

The end is near.

One thing to take note is the linked article. This is from the Hollywood Reporter, an industry publication. What we are dealing with is the industry itself sounding the alarm.

Sadly, for it, there is no coming back. This is going to end up like Blockbuster and other entertainment phases that went into annals of history.

We already saw MGM acquired by Amazon. Paramount which has both movie and traditional television properties is going to a company owned by Larry Ellison's son. In other words, media properties are being swallowed up by technology companies.

For this reason, YouTube as the new King of Media might not be a surprise.

Of course, we could see another wave of change as decentralization and distribution moves ahead. The ability to start a platform has fewer barriers than traditional media. For this reason, the next decade could see even more players enter the market.

What are things going to look like once generative AI (video) reaches the masses?

It will be an interesting ride.

Posted Using INLEO