When Sumner Redstone handed away, ViacomCBS, the media empire he fastidiously curated, had an enterprise worth of roughly $40bn. Included within the colossus: the CBS broadcast community, movie studio Paramount, e book writer Simon & Schuster and cable networks MTV and Comedy Central. Collectively it incorporates among the most profitable artistic minds on the planet.
In the meantime, user-generated content material on smartphone app TikTok has been talked up at a possible $50bn valuation. As an alternative of films, publishing and TV, TikTok options teenagers lip-syncing and dancing free of charge. Consumer-generated content material on Fb, Twitter and YouTube can be thriving. The likes of ViacomCBS and different legacy media recognized for top of the range and excessive prices appear to be change into much less related yearly.
ViacomCBS shares are down 30 per cent this yr. Shares in rival Fox have dipped about the identical. Promoting income throughout conventional broadcast and cable networks fell greater than 25 per cent within the second quarter, based on analysis agency MoffettNathanson, as entrepreneurs have pulled again spending. Some firms, together with ViacomCBS, have tried to pivot to streaming providers. Excessive start-up prices and a crowded area dominated by Netflix recommend their prospects are dim.
Shoppers nonetheless need high quality programmes. They only have too many different shops to select from. AT&T spent $85bn to purchase legacy media firm Time Warner. Even with its lustrous community HBO, it has to date failed to interrupt via. AT&T shares are down 23 per cent this yr.
Staying out of the content material wars and remaining a worthwhile if uninteresting toll-collector could possibly be the wisest transfer. Constitution Communications, the cable TV and broadband goliath assembled by John Malone, has seen its shares rise 22 per cent this yr to hit an enterprise worth of $210bn. Cancellation of cable tv subscriptions continues nevertheless it has managed to maintain promoting broadband web to People caught at dwelling. Within the second quarter, it added greater than 800,000 new web subscribers — almost 4 occasions the extent final yr. The winner amongst legacy media titans could possibly be the dumb pipes.