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Media C-Suite Week No. 7/2024, Issue No. 43

Inside the Media C-Suite Issue No. 43

Inside the Media C-Suite 

Welcome to the newly re-named 43rd issue of our regular fixture exploring deeper thoughts within the mind of the Media C-Suite.

It’s Tuesday, the 13th of February, 2024.

On Our Minds

There is no escaping the aftermath of this past weekend.

There was no global premiere of a new blockbuster movie out of Hollywood. No outrageous awards ceremony. This past weekend was not about style on the red carpet. This past weekend was all about drama on, and around, the pitch.

In Europe, the Six Nations rugby tournament presented three grand fixtures in its second week of play, pitting Scotland (16) against France (20) in Edinburgh’s Murrayfield Stadium with over 67,000 fans attending. England (16) played Wales (14) at London’s Twickenham Stadium before 82,000 fans. And, Irland (36) played Italy (0) in Dublin’s Aviva Stadium to nearly 52,000 fans.

Rugby’s rapidly developing, and primarily free-to-air, television audience is expanding well beyond its traditional play ground. New markets such as Germany, Italy and the US have reported significant growth in viewer numbers for the Rugby World Cup, which took place in France during December last year. That tournament was the most viewed yet with 1.33 billion viewing hours across both linear and non-linear broadcasts worldwide (up 19% from 2019 and 30% up on 2015).

Six Nations games regularly draw between 3 – 4.5 million viewers in the UK alone. The 2023 tournament recorded an estimated 121 million television viewers worldwide.


This related article might be of interest:

The Masters Trophy, Augusta National Golf Club

Golf’s Power Drive into Media Disruption

How a single app for a golf tournament offers a defining moment to change how everyone experiences sport as entertainment.


And yet it was another game on Sunday in Las Vegas that drew the most lucrative audience. In the US, Super Bowl LVIII lived up to its hype with a nail-biting match in which the Kansas City Chiefs’ super-star quarterback Mahomes threw the winning touchdown in overtime; 25 – 22 against the San Francisco 49ers.

And nail-biting is literally what we saw, as CBS producers caught the winning shot of uber-celebrity Tailor Swift, nails in teeth, as her beau’s team fought the final moments of the game to an uncertain victory in a sold out stadium bursting with over 65,000 excited fans.

Those fans, by the way, had spent US$8,940 per ticket on average just to enter the stadium (equating to US$581 million in ticket sales). An estimated 150,000 people descended on the city of Las Vegas to be in the vicinity, spending an estimated US$215 million on food and beverages, contributing to a US$1.1 billion gross economic impact on Nevada.

That’s just for this one weekend.

Where does all that money come from?

It wasn’t from the Swifties.

Generations

On New Year’s Eve, sixty years ago, the last ‘Baby Boomer’ was born.

If one paid close attention to social media, television programming and most films these days, one would be forgiven for believing that the Boomer generation is now all but irrelevant.

Much discussion among media programmers, content curators and distribution executives within M&E focuses almost exclusively on younger generations that are, to be honest, far more connected and vocal about what they want; and in particular, the perceived sensitivities of others. And, as human nature would have it, those with the loudest voices are heard above all others.

That prevalence of voice has dramatic effect.

From plot lines to casting, the catering of entertainment content today is most often weighted heavily in favour of what network execs and studio bosses believe will be most attractive, or least offensive, to Millennial and Gen Z audiences.

Within the United States and the United Kingdom, in particular, this is a phenomenon that is driving narratives often lost on the Boomers and the seemingly forgotten Generation X. Adhering to the (culturally mis-appropriated) term ‘woke’, or wokeness, few media execs care to resist the call of such a vocal audience.


You might enjoy this related interview:

Philipp Grothe, Just One Question

Just One Question: Philipp Grothe

Building global Football into a multi-billion dollar sport isn’t enough for some. The Big Question beckoned.


Demographically, in the United States, the Millennial Generation (born 1981 to 1996) and Generation Z (born 1997-2012) together comprise an estimated 42.5% of the population. This is a slight majority over the Baby Boomers (born 1945-1964) and Generation X (born 1965-1980), which comprise a combined 41% of the population.

Yet Boomers and Gen X make up, by far, the largest population of business owners, successful entrepreneurs and professional investors in the United States. According to US Government data, 39.6% of small business owners are Baby Boomers. 47.2% are owned by Gen X. Combined, Boomers and Gen Xers own a whopping 86.8% of the small businesses in America. Millennials and Gen Z own just 13.9% of small businesses between them. With some variation, this same statistic may prove true globally.

The result is that Boomers and Gen X are the population cohorts that make the most impactful economic decisions. They are also the audience demographic that still watches legacy television with the discretionary capital for consumer products and services that advertisers are most interested in reaching.

So, what is the disconnect between those who have the most effect on the economy and those who drive the content narratives being pushed out across the globe?

Attentional Bias

A strobe light flashing in the dark will grab most people’s attention.

In the same way that predators are attracted to a feeding frenzy, human minds tend to gravitate toward the opposite of mundane. The difference, arguably, is that human minds analyse the data we perceive. Our imaginations project trends, fill in gaps and influence our decisions beyond the immediate situation.

Our social structures introduce ideas, reinforce beliefs and can even lead us to perceive ourselves, others and the world at large in a remarkably different way than objective facts would support.

What we pay attention to matters. Attentional bias is a cognitive mechanism in which our mental picture of reality filters the data we perceive in favour of what fits our world view. An anxious person will focus on that which makes him or her anxious, often ignoring other data that would offer comfort or reassurance.

The same is true on a social level.

Story-tellers often capitalise on this cognitive bias, reinforcing popular mis-perceptions that attract the attention of relatively small percentages of large populations and convert them into profitable audiences. Confirmation bias, another human cognitive mechanism, then amplifies social cohesion around the mis-perceived world-view of that group.

This was once thought of as propaganda. Charismatic sociopaths build cults with this process. Tech entrepreneurs have become tech billionaires exploiting these cognitive biases and incorporating them into social media and content streaming platforms. It is now hard-wired into the algorithms that select tailored content for the attention of the world’s estimated 5.6 billion internet users.

Technology has both made it easier and accelerated the process of shifting the world view of entire populations.

Yes, Millennials and Gen Z are, quite literally, the future. They are also easily recognisable through social media communication channels, which have over-taken most traditional direct polling data. It is easy to identify the behaviour of internet users, particularly social media users. The technology is specifically designed to record and analyse user behaviour, and to make it productive.

Attentional bias works on media execs as strongly as any other human. For media executives seeking to curate entertainment content, that abundance of data, and the direction it points in, is hard to resist. The fact that Millennials and Gen Zers are, by far, the dominant statistical population sample within those data sets can get lost in the noise.

The fact that Boomers and Gen Xers are still out there, still going strong and are still the audience with the money seems to have been lost as well.

Our Take

The Media Majors have suffered from this disconnect quite dramatically, and are actively pivoting to correct course.

Luckily, the CEOs of most multi-billion dollar publicly-traded media conglomerates are either Boomers or Gen Xers. Yes, one might excuse a leader from listening to his staff and buying into the information that the data is telling them.

This is not new. Remember Hans Christian Anderson’s folktale of The Emperor’s New Clothes?

But at some point, a CEO’s job is to generate sustainable profits for the shareholders.

For the Media Majors, lately, that hasn’t been happening.


Iger waiving to WGA picketers a Disneyland

Who Iger Answers To

One of the highest paid executives on Earth is credited by many in Hollywood with holding unionised creatives to the fire as if it were his personal inclination.  But it is strategy, not animus, that drives experienced CEOs with legacies to protect.


While catering to the loudest voices may offer statistical results as measured by web-traffic user metrics and TiKTok trendlines, financial results are ultimately what count.

Transitioning multi-billion dollar publicly-traded media conglomerates from linear television networks and theatrical distribution businesses into FAST internet networks and digital streaming platforms to compete with Netflix has taken a toll. Much of the work-force behind this transition are comprised of Millennials with true belief in themselves and the change they can forge.

Despite clear signals from periodic inflection points in the data from films like Top Gun: Maverick and television series such as Yellowstone, studio bosses may not be capable of changing course on content curation and production process away from Millennial and Gen Z targeted audiences. Not quickly, in any case.

But there are other forms of entertainment content that are easier to embrace and play directly into the appetites of Boomers, Gen Xers and their wallets.

One of those forms of content is sport.

The executive power word of the day: Balls.

Just Catching Up?

We’ll help you get up to speed.

Spectators

Twice now, the Media C-Suite has published articles saying that, “fans of live, televised sporting events such as football, tennis and golf outnumber any single nation on Earth (yes, including China). They are, taken en masse, the largest single entertainment audience ever conceived of.”

See, Golf’s Power Drive into Media Disruption – The Media C-Suite (mediacsuite.com) and

Disney’s Multi-Billion Dollar Poison Pill – The Media C-Suite (mediacsuite.com).

The existence and reach of this audience has become a major influence on the economic development strategy of one of the world’s most affluent investors: the Kingdom of Saudi Arabia. With outright acquisitions of entire sports such as Golf, with the Saudi LIV Golf league and the purchase of some of football/soccer’s most popular players for its Saudi Pro League, the strategy offers direct influence on the hearts and minds of billions of fans around the world.

The Media C-Suite has discussed Sovereign Wealth’s attention to sport in two different feature articles that you might find worthwhile.

See, Saudi’s New Investment Strategy in Media & Entertainment – The Media C-Suite (mediacsuite.com) and, Entertainment Targeted by Sovereign Wealth – The Media C-Suite (mediacsuite.com).

Purely financial motives may be prompting Saudi’s Gulf neighbours to make sizeable investments of their own.

See this great article from The Athletic for corroboration, Saudi Arabia’s takeover of world sport: Football, golf, boxing and now tennis? – The Athletic

Globally, the rights to provide sports coverage to sports fans was worth nearly US$56 billion in 2023.  Without doubt, one market segment of this global audience for sport is coveted above all others: those in the United States. Comprising nearly half of the global market value in sports rights, the United States is where every major sport wants air time.

By far the most lucrative entertainment content market on the planet, M&E revenues within the US are estimated by PWC to grow to US$725 billion by 2027. Of that, sports rights are projected to grow in value to nearly US$64 billion by 2026.

2024 marks a pivotal year for this lucrative US market, and Saudi will now have to contend with the re-awakened attention from celebrated CEOs of publicly-listed media conglomerates that can, and will, exercise control over the infrastructure that delivers content to American audiences.

As usual, Netflix may have paved the way. In December, Netflix signed a 10-year, US$5 billion deal to live stream World Wrestling Entertainment’s flagship programme, Raw. That live-action event will move from the USA Network, owned by NBC/Universal, onto Netflix starting in January 2025.

WWE’s Monday Night Raw is America’s longest-running weekly episodic TV series with women comprising over 40% of the audience. Raw’s 2024 premiere featured a return of fan favourite, Dwayne “the Rock” Johnson being watched by 1,751,000 viewers.

The deal will effectively showcase Netflix’s use of technology to live-stream a highly popular live-to-air show that will easily transfer to other live-stream sporting events on the platform.

The ten-year length of the deal is noteworthy.

With the FIFA World Cup coming to North America in 2026, the 2028 Winter Olympics being hosted in Los Angeles and the Rugby World Cup being played in the United States in 2033, the next 10 years is being called a “Golden Decade” for sports in the American market.

What It Means

A renewed, concentrated focus on sports offers the CEOs of the Media Majors a clear and direct path back toward the more lucrative Boomers and Gen X demographics within the entertainment content space.

The value of live sports, and the costs of acquiring the associated sports rights pale in comparison to the rights to develop sport-related stories that correspond to them and have the built-in sports’ audiences in tow.

The stories that can be developed into entertainment content out of the history and present drama surrounding highly-popular spectator sports easily rival the cinematic universes of Marvel and DC Comics. Acquiring those rights are often a component of sport rights deals for live sporting events.

By offering the technology to shift live sporting events from linear, broadcast television and cable networks to OTT streaming platforms, operators of those platforms secure the rights to create new intellectual property and the copyrights that go with them, which is ultimately the only legal right to generate money from content.

This move directly shifts the focus of the Media Majors onto a strategy to convert the forecasted US$64 billion live sports rights market into the wider US$725 billion entertainment content market, leveraging the attention and momentum of this Golden Decade of sport in America. The Media Majors seem to be acting in concert to make this happen as quickly as possible, and reverse the stagnant (at best) share price trends they have experienced.

Last week, Disney announced that it would transform ESPN from a cable network to a fully-fledged OTT streaming service by Q3 2025. At the same time rival conglomerates Warner Bros. Discovery and Disney announced the intent to launch a new, combined sports streaming platform that should roll out by the Autumn of this year.

Merger and Acquisition activity across the sports entertainment space should be expected.

For Media Entrepreneurs, this means opportunity to shift content development onto sport-related stories. For professional investors, this just means opportunity, period.

Looking Forward?      

Preparation is the Key.

Here are a few articles to get you moving in the right direction.

1 Comment

  1. A very astute analysis and o so true. I guess this is again a form of myopia where execs fail to look beyond the hype and missing what is happening close to them as I assume most of them are babyboomers and GenX themselves

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