My New Year’s toasts to you are my annual predictions for the worlds of media, entertainment and tech. This time I do it differently, laying out each of my 12 predictions by month. Now THAT’s bold! Yes, to a certain extent, that’s a gimmick to keep things festive and fresh. But my predictions are real, and my expected timing of how they play out is at least directionally correct. My holiday wish is that this unique format leads to even more conversation with friends as we sip our martinis.
January: Call it Netflix’s new year’s hangover, as its ad-supported tier isn’t the great hope and savior that the streaming giant and its investors hope it will be
I predicted this reality weeks before before Netflix announced its initial migraine-inducing ad-supported results. Let’s face it. Netflix’s most lucrative domestic market is fully saturated. To make things worse, Netflix faces increasing cannibalization at the hands of its increasingly hostile streaming enemies. That means its only escape is international growth if it wants to continue as an independent. But pricing pressures overseas are even more challenging in a significantly mobile-first world. That’s why Netflix ultimately will be bought, as I’ve long predicted. And, as I wrote in a recent column, Comcast is now best positioned to be that buyer thanks to the Feds’ increasingly belligerent antitrust actions against Big Tech. Actually, this would be a merger of equals, since Netflix and Comcast market caps are roughly the same.
February: Hollywood announces its first significant M&A pairing in this month of Valentine’s Day that kicks off a year of consolidation between players big and small
The first big deal to be announced will be an acquisition of a boutique studio or production company like Blumhouse, A24 or Anonymous Content (which was the focus of another recent column). But, by year’s end, at least one storied major studio like Paramount or Warner Bros. Discovery will be bought by, or merge with, a significantly bigger fish backed by hundreds of billions of dollars of cash. Amazon’s acquisition of MGM may be the first, but it certainly won’t be the last. The big prize, of course, is Netflix. And Comcast, as noted above, is the No. 1 contender — poised to merge the streaming giant into NBCUniversal and strut like a proud Peacock when it shocks the world. We won’t be shocked, of course, because you read it here first.
March: 2022’s year-end icy chatter of Chat GPT thaws into a chilling river of recognition in Hollywood that AI’s new sophistication threatens both above and below the line jobs
I asked the remarkable chatbot what AI’s impact will be on the Hollywood community, and this is its verbatim response: “Overall, AI has the potential to enhance and streamline various aspects of the film industry, from screenwriting and character design to marketing and distribution.” Just reflect on those words for a moment — the potential to “enhance” and “streamline” the entire process of visual storytelling. As I wrote in my last column, this sounds more like fundamental disruption to me — threats to all Hollywood players that we ignore at our own peril. So what can we do about it? I asked Chat GPT that question, and you’ll see its response in that column. You’ll also see how the bot responded (in seconds, by the way) when I asked it to write a three-act story inspired by George Orwell’s dystopian novel “1984” that reveals AI’s impact on Hollywood by the year 2030.
April: Winter’s ice is nearly gone now, and Elon Musk’s Twitter meltdown is nearly complete. But Musk’s “burn it all down” actions finally reveal his real diabolical plan — payments and crypto.
Musk’s manic moves fuel mass defections and leave room for new credibility-conscious players — who believe in preserving society and investing in content moderation — to slowly emerge with the first buds of Spring. By this point, most respected global leaders have fled Twitter’s dark winter. But perhaps that’s exactly what Musk’s point was all along, because now his abominable snowman becomes something else entirely — a hub for payments and crypto (I wrote about this possibility in a recent column). After all, Musk’s “crypto bros” revere the entrepreneur’s machinations, even as we increasingly revile them. They officially become his new Pay Pals.
May: Crypto may be crashing, but NFTs graduate with honors as commencement begins for real transformational Web3 opportunities for both creators and consumers
While most everyone conflates the two, crypto and NFTs aren’t the same. Yes, both are born out of the same Web3 blockchain blood. But NFTs can have real lasting utility and value (the real ones, that is, as I previously wrote). They also disintermediate. Now content can bypass the middleman and go directly to the source of cash — the audience. Expect gated digital access to major films and new music. And anticipate new sources of financing for Hollywood producers and new ways for artists to significantly monetize (which, in turn, will fuel more art with this new season’s heat). Meanwhile, crypto bros will try to regroup after a horrific 2022. Perhaps Musk will lead the way.
June: Streaming content budgets stabilize, as the cool summer breeze soothes unsustainable cash burns
Gone for now are the days that Netflix and others continuously up their content antes. Let’s face it, $17 billion annual spends are tough to justify in a hyper-competitive market where all belts (including consumers’) tighten and churn is real. By this midway point in the year, all major streaming players are spending less on volume, and more on focused impact. Evergreen, ever-reprogrammable franchise content is where it’s at. Just ask Disney — Marvel, Pixar, “Star Wars,” Disney Princesses — whom you can visit at your favorite theme park now that school’s out for summer.
July: Ticketmaster feels Congress’s summer blazing heat, and it only gets hotter from here
Call it the “Taylor Effect,” as other ticketing platforms (including new Web3 ticketing) sense the opening caused by the debacle and Swiftly seize it. Maybe virtual monopolies like Ticketmaster, when operating in a vacuum, feel no need to innovate to solve basic fundamental consumer issues — like broken ticket queues, rampant fraud and massive price gouging at the hands of code-breaking resellers. But mega-stars ultimately hold the mega-power, and Taylor Swift’s fans will follow her lead to someone new, especially when overheated. And the Feds, yet again, will lead them to water. They already are.
August: Mark Zuckerberg’s Facebook flip-flops continue to kick sand into his all-in Meta bet on “social VR”
Zuck burned $3.6 billion on his looped dreams in Q3 2022 alone, as he continues to be blinded by ego and fails to see that today’s real mass market metaverse opportunity is in the world of games (I wrote about this in yet another recent column). But misreading the market for social VR isn’t the sole culprit. The Feds will make sure that Meta is Zuck’d — and they take no August vacation! Facebook and Instagram are the antitrust police’s enemy No. 1. Wait, there’s more. Tim Cook’s Apple is yet another mega-threat. While Zuckerberg has been flailing, Cupertino has been learning — and chomping at the bit. Which leads me to…
September: Apple schools Meta as it finally matriculates to metaverse-ity with its much-anticipated “next big thing” — its new VR/AR headset
Professor Tim Cook will stand on tech college’s greatest stage and lead us all in class to pledge allegiance to Apple’s new immersive flag. But unlike Zuckerberg, Cook won’t bet the farm on the metaverse and “social VR.” Instead, he will under-promise with other use cases and then massively over-deliver. Apple’s introduction of AirPods is the model here. Yes, those little white Q-tips didn’t “wow” us when first announced. But look at them now. AirPods are the most successful wearable of all time, stealthily becoming a gargantuan cash machine that continuously spits out billions and billions of cash.
October: It’s the great Bezos, Charlie Brown, as Blue Origin rocket man himself returns to Amazon earth as CEO just in time for the upcoming holiday shopping season.
Just like his fellow captain of industry Bob Iger of Disney, captain Jeff was bored anyway. It’s much more fun to explore transformational strategic possibilities that impact virtually everyone on the planet rather than float in space alone. Bezos has already taken his other-worldly joy ride, and it was fun while it lasted. Now there’s work to be done. And in the minds of Wall Street investors, Bezos’s return to the mother ship is heralded as the holiday season’s greatest gift of all. Well, second greatest (see December’s prediction below).
November: It’s data savings time, as the Feds turn back TikTok’s clock, and Spotify’s stock falls backward.
As the year ends, geopolitical realities really hit the juggernaut’s Chinese home, as both sides of “the Aisle” pressure the Feds to pull the app’s hall pass. To be clear, TikTok certainly won’t be stopped in 2023. But much to our kids’ dismay — and lack of Thanksgiving because of it — TikTok’s growth will be slowed by regulation and political pressure on the distribution front. Meanwhile, streaming music giant Spotify’s losses continue to mount. CEO Daniel Ek can’t escape his existential conundrum — i.e., the more Spotify makes, the more it loses, thanks to its variable cost structure. No one is happy here. Neither investors, nor the artists who feed the service. It’s one big turkey all around.
December: It’s a true holiday miracle, as Disney’s head cheese Iger fast-tracks discussions with Apple’s Cook to buy a magical new gift that even the Feds’ antitrust Scrooge won’t take away
Let’s not forget that Iger served on Apple’s board until 2019, and Steve Jobs birthed Pixar in the first place — so the shared DNA is undeniable. A long shot? Of course, thanks to the Feds’ inevitable antitrust animus alone. Iger recently dismissed this possibility floated by us here at TheWrap as “pure speculation.” But no good CEO shows their hand before they play it, and Iger is both smart and charming. And if he and Cook eventually do marry, it would be a deal that Wall Street would love in perhaps the greatest Christmas gift that any investor could wish for. Ultimately, these two leading media-tech elves will win over the Feds by agreeing to divest Disney’s theme park division, together with potentially ABC Television and ESPN, as conditions of the deal. Hey, the holiday season is a time for giving, not just taking!
So let’s raise our glasses and toast to you, creators and innovators! The 12 days of Christmas may be gone. But the 12 months of Silicon Valley-infused Hollywood transformation are just beginning!