What Media Industry Layoffs Tell Us About Advertising, Streaming, & Media Culture

“First and foremost is advertising spend. These companies are extremely exposed to a down advertising market, and back in September of this year, the advertisers were reading the economic tea leaves and they said, ‘we see a recession coming, we’re pulling back our advertising budgets for 2023. So we’ve seen this coming, and what you’re now seeing with the layoffs is the results of that. It’s the anticipation of a down ad market where the media companies have to lay off. They do it all the time. All the time might be an exaggeration, but they’ve done it before. It’s a cyclical thing. They’ll do it again….
The other thing that is driving the layoffs are competition from streaming services, but that’s been going on for a long time now. The true issue with streaming is that when the legacy media companies meeting the traditional media companies that started in traditional television, in film, when they finally jumped on the bandwagon and said, ‘we need our own streaming services,’ they then were forced to ramp up quickly, and it took a lot of resources and a lot of budget that got allocated to these streaming services. And in my opinion, they probably made projections that were a little too optimistic about how quickly they could get subscribers….
And then the other thing, frankly, that’s impacting the layoffs right now in the media industry is consolidation. Whenever you have consolidation in the media industry, you are going to have layoffs. It has been going on for decades. We saw a lot of it in the 1990s when there was a ton of consolidation after the FinCEN rules got relaxed. We saw more recently when Disney took over FOX, and we’re seeing it now with Discovery acquiring Warner Brothers. So those are the primary reasons behind all of these layoffs right now. It’s cyclical.”

“2022 has been a very difficult year for media companies to make the case for both growth and profitability. In the face of an advertising recession and potentially a global recession, increased competition, and uncertainty over business models, profitability has gone to the forefront to prove to Wall Street and to buy time. As to what’s ultimately going to work, there may be a clue in what we saw in the partnership between Netflix and Microsoft earlier this year, and that is that big media and big tech may really need each other to survive, thrive, and grow. And that may be something we see a lot more of in the months to come.”

 ”It’s not a surprise to me that there’s massive downsizing and layoffs going on in traditional broadcast news. One, journalism right now as a whole is under fire for their ethics and their reporting. It’s being challenged in many places with massive consequences. Also, much of the layoffs that we’re seeing are actually happening in liberal progressive media outlets, while meanwhile places like News Nation, which has more of a conservative bent are actually hiring a lot of the CNN folks that were laid off. So we’re seeing a shift in where the politics of media is going.
The Washington Post is owned by Amazon’s Jeff Bezos. CNN is owned by Time Warner Discovery, and so a lot of these media have served their purpose in the last couple years. Also, what has happened since the pandemic and the shift in the media culture is many of these parent companies have launched their digital streaming services to great success. So the broadcast news are inconsequential at this point in terms of functioning for income for these massive broadcasters.”