The state of the digital media economy and the shifting economics of TV and streaming

In this week's Media Briefing: - Businesses on the brink - The post-cookie identity picture is a freeze frame - Media execs prep for recession, layoffs at Vox Media, The Washington Post reinforces its return-to-office policy and more In this week's Future of TV Briefing: - Production costs - The crawl to short-form video revenue-sharing programs - Reels’ struggle for advertisers, Comcast shops for a TV maker, Twitch streamers’ financial woes and more You can get a taste of these member-only features below and [subscribe to Digiday+]( to stay ahead with exclusive briefings, original research, reports and guides, tutorials, unlimited stories and much more. [SUBSCRIBE]( By Tim Peterson and Kayleigh Barber Not all media analysts are ready to call it a recession, but there are plenty of red flags popping up in the digital advertising economy. Earlier this month, IAC issued its June Monthly Metrics report revealing its media subsidiary Dotdash Meredith had an 18% decrease in pro forma digital revenue in June 2022 compared to June 2021 — pro forma measures Dotdash’s comparable revenue from before and after its acquisition of Meredith last December. For context, this decrease followed a smaller 3% year-over-year decline in pro forma digital revenue in May. Representatives from Dotdash Meredith declined to speak further about the reasons for why pro forma digital revenue was down in June, stating that the company does not break out the various businesses — commerce, programmatic advertising, branded content, licensing and others — in its monthly or quarterly earnings reports. While one company does not speak for the whole of the industry, it does beg the question if Dotdash Meredith is alone in experiencing a decrease in revenue at the halfway point of the year. And beyond that, how much the economic slowdown of 2022 mirrors the pandemic-induced recession of 2020. “That was a quick recovery [in 2020]. Q2 was rough but then Q3 bounced back. I don’t know if this one’s going to be so quick. It will for sure take us into 2023,” said one publishing exec. [FULL STORY]( By Tim Peterson The global economy is in a state of flux, and so is the economy of TV and streaming production and development, as distributors seek to manage costs in a way that presents both opportunities and challenges to producers. Netflix and CNN Films are showing producers a new willingness to co-finance original productions that would provide producers greater rights to projects, and HBO Max is putting deals on hold, according to entertainment executives. Spokespeople for Netflix, CNN Films and HBO Max did not respond to requests for comment. At the same time, the costs of production have increased with the broader macroeconomic trends of rising inflation, rising interest rates and ongoing supply-chain constraints, which are putting a further twist on the production and development market. “The landscape is hard right now. From a producer side, our financing costs just went up because of interest rates. So forgetting the hard part about trying to find crews and locations — which has been really, really hard — just the cost of capital has gotten expensive,” said one entertainment executive. They added, “if you look at a movie that’s $30 to $50 million [to produce], there’s probably another close to 750 [thousand] to a million dollars just in financing costs.” The overarching change to the production and development landscape appears to be a shift to the “age of austerity,” as Bloomberg put it. As the entertainment executive said, “whenever the cost of capital goes up a little bit and when studios want to pay less in-year, all of a sudden they shift back to, ‘Hey producers, can you help finance these things?’” “What we’re seeing is a world in which every streamer wants to be very competitive but doesn’t have the dollars to buy projects outright,” said a second entertainment executive. [FULL STORY]( More member exclusives [Publishers don’t make money on TikTok, but that’s not stopping them rushing on to the platform this year]( [Future of TV Briefing: How search stands to play a bigger part in digital video strategies]( [Digiday+ Research: Beyond the hype, how publishers are actually using AR and VR]( [MORE STORIES]( [Facebook]([Twitter]([Instagram]([LinkedIn]( [Share]( [Tweet]( [Share]( [Forward]( Digiday Media 110 Wall St WeWork, 3rd Floor New York, NY 10005 You received this email because you're a part of the Digiday community. Unsubscribing will remove you from ALL Digiday email. [Preferences]( | [Unsubscribe](