The Illusion of ESG Investing — with Tariq Fancy

Ad-Supported Models

Scott Galloway examines the shift towards ad-supported tiers in streaming platforms and their economic implications. He highlights how companies like Apple and Amazon can absorb losses in streaming due to their diverse business lines, unlike standalone streamers such as Netflix, which face increasing competition and cooling profits 1. Galloway notes that Disney, despite its massive subscriber base, still incurs significant losses in its streaming division, indicating the challenges of monetizing content in this saturated market 2.

"There's so much money pouring into content. This year alone, the top nine media and technology firms will spend roughly $140 billion, which is up about 10% year over year."

--- Scott Galloway

He suggests that the influx of capital into content creation necessitates a return on investment, pushing platforms to explore ad-supported models.

   

Content Investment

The financial investment in original content is a critical strategy for streaming platforms to attract and retain subscribers. Scott Galloway discusses how consumer expectations, largely shaped by Netflix, demand high-value content for minimal subscription fees, creating a challenging environment for new entrants 3. He predicts that the intense competition and high content costs will lead to consolidation and layoffs in the streaming industry over the next 12 to 24 months.

"The expectations of consumers have been set by Netflix. I expect for every dollar a month I give you, I want the equivalent of a billion dollars in original content."

--- Scott Galloway

Galloway suggests that the unsustainable trajectory of content spending will force platforms to reassess their strategies.

   

Market Positioning

Major players in the streaming market are positioning themselves to endure challenges by leveraging their diverse business lines. Scott Galloway points out that companies like Apple and Amazon can sustain losses in streaming due to their profitable operations in other sectors, unlike Netflix, which relies solely on its streaming service 1. He emphasizes that the current market dynamics are unsustainable, with too much capital flowing into content creation without adequate returns.

"There's also some great businesses Roku, Twilio, Moderna that are off 70, 80%. I mean, great companies that have just gotten absolutely plastered."

--- Scott Galloway

Galloway warns that this could lead to a similar downturn in the streaming industry, necessitating strategic adjustments to maintain viability.