Insights & Analysis: Publicly Traded Companies in Q4 2022

Every quarter, business analyst Matthew Scott Goldstein details and shares his insights on what he saw happen with publicly traded companies across advertising, technology, and media.

Top-Level Insights for Publicly Traded Companies Q4 (2022)

Macro Environment: What We Saw in Q3 2022

• Publishers are trying to reinvent themselves as the advertising business is shrinking considering the economic conditions in Q4
• E-Commerce is the new holy grail for the publishers and may someday replace advertising
• When do celebrities, like Mr Beast, turn into Billionaires creating more value than traditional media companies
• TikTok is planning to build product fulfillment centers in the US to bolster its e-commerce operations.
• Though will TikTok be banned in the US one day?
• Looks like all the advertising growth in 2023 will come from Search/Google, Social, which I assume is all TikTok as Facebook contracts and OTT/CTV which is the addition of Netflix and Disney to advertising
• Live Sports still controls the ad-supported TV infrastructure
• Google executives declared ChatGPT, the popular A.I. chat bot, a “code red” threat to the tech giant’s core search business
• For the first time since 2014, Google and Meta’s share of total digital ad spend has dropped below 50%
• Yahoo and Taboola, announced a 30-year exclusive partnership, I assume no one reading this email will be on the industry in 30 years
• Apple continues to be the 800-pound juggernaut in most all rooms, and will eventually be a dominant playersin the digital advertising ecosystem
• Prices for all streaming services are increasing
• Facebook warns it could ban news in the US if Congress passes a bill that would require the platform to negotiate with and compensate publishers for their content.
• Will Iger do anything magical with Disney, I assume he has something up his sleeve
• Web3 has slowed down as the economy/crypto has slowed
• Everyone says it is now time for new companies to invent themselves in the ad tech ecosystem, but I have seen very little evidence of this so far, maybe this will happen in 2023? Maybe it won’t happen this time around because of the power of Big Tech?

Macro Environment Expanded: What We Saw in Q3

• Publishers are attempting to adapt to declining advertising revenue due to economic challenges in the fourth quarter.
• E-commerce may become a key focus for publishers as they seek new sources of revenue, and celebrities such as Mr Beast may continue to grow their influence and create value beyond traditional media companies.
• TikTok is planning to build fulfillment centers in the US to support its e-commerce operations, but it’s uncertain if it will face any bans in the US.
• It’s expected that search, social media, and OTT/CTV platforms will drive advertising growth in 2023, with live sports potentially maintaining a role in the ad-supported TV infrastructure.
• Google executives have identified ChatGPT, a popular AI chatbot, as a potential threat to the company’s search business.
• Google and Meta’s share of digital ad spend has fallen below 50% for the first time since 2014.
• Yahoo and Taboola have announced a 30-year exclusive partnership, though it’s unclear how this will impact the industry in the long term.
• Apple continues to be a major player in various industries and may eventually become a dominant force in digital advertising.
• Facebook has warned that it may ban news in the US if Congress passes legislation requiring the platform to compensate publishers for their content.
• It’s uncertain what plans Disney CEO Bob Iger may have for the company, but he may pursue new opportunities and innovations.
• The development of Web3 and the cryptocurrency industry may also continue to evolve, though they have slowed in recent times due to economic and market factors.
• It’s possible that new companies will emerge and play a significant role in the ad tech ecosystem, but the power of established tech giants could also continue to impact the industry.

Deeper Insights for Publicly Traded Companies Q4 (2022)

Digital Media Publishing: What We Saw in Q4 2022

• Reddit introduced a host of updates to its Ads Manager with the goal of helping new and existing advertisers of all sizes get started on the platform, manage their campaigns and optimize their results.
• Fandom is building out a full-funnel offering for marketers. And its acquisition of several media brands from Red Ventures is the latest step forward in that initiative. Fandom snapped up GameSpot, Metacritic, TV Guide, GameFAQs, Giant Bomb, Cord Cutters News and Comic Vine from Red Ventures.
• The Chicago Sun-Times, after months of rumors, has taken down its paywall and is providing content free to anyone who shares an email address, according to NPR. The tabloid instituted a paywall last December. But the Sun-Times was then acquired by Chicago Public Media, owner of WBEZ Chicago, the city’s NPR station. The paper now offers unlimited online access to readers who register.
• Bloomberg Media Is shutting off Its open-market programmatic advertising, the publisher will use the inventory, in part, to promote other product offerings
• Warner Bros Discovery is looking at options to expand sports and culture site Bleacher Report, including extending it to TV.
• The media organization Semafor launched with no less an ambition than reinventing the news story. Semafor is the brainchild of Ben Smith — former media reporter for The New York Times and, before that, former editor-in-chief of BuzzFeed — and Justin Smith, ex-CEO of Bloomberg Media. Since both men — who are not related — quit their previous jobs in January, Semafor has raised $25 million and hired more than 50 staff members
• MrBeast, the YouTube star turned entrepreneur, is looking to raise around $150 million for his business at a roughly $1.5 billion valuation, three sources familiar with the conversations told Axios. Why it matters: The funding would help MrBeast — whose real name is Jimmy Donaldson — quickly expand his massive video empire further across restaurants, consumer goods and merchandise.
• The former Hill owner has raised $40 million to launch a Daily Mail, Washington Post hybrid
• Digital news outlet Insider is rolling out a major newsroom reorganization, removing much of its paywall in a strategic shift away from a subscription model that just a few years ago was seen as the company’s future.
• Time has appointed Jessica Sibley as its CEO, as the 99-year old media brand seeks to expand away from print.
• Insider made its plan to move 60 journalists in front of its paywall without consulting staff and is now negotiating with the union.
• Lincoln Project, ABC News alums launching pro-democracy media company, Resolute Square, say they aim to counter the right-wing media ecosystem — and be a home to people who reject political extremism and the GOP.
• CVC Capital Partners and Group Black are pursuing a joint bid to buy Vox Media. Despite industry challenges, Vox remains a top digital media company, housing popular sites like Eater and SB Nation, plus Thrillist and Seeker, which it owns after its Group Nine Media deal last year. Vox was valued at around $1 billion after a $200 million funding round in 2015.
• Michael Clinton and Hearst are going after a segment that may have been underrepresented to date: The “Re-Imagineers:” people age 50+. Clinton and Hearst have introduced ROAR, a B2B digital content platform, consumer membership community and intelligence insights provider. Clinton founded the new entity with Hearst as partner and investor.
• New York Times-owned sports publisher the Athletic said it plans to double its coverage of professional women’s sports through a partnership with Google
• The Recount, a video news startup that launched in 2018, told employees it plans to suspend operations. The company, which raised over $34 million since 2020, struggled to find a profitable business model. Like most media companies, its prospects grew worse amid the economic downturn
• Bloomberg Media has scored 20% growth in Q3 revenue YoY and is working on delivering an improved digital experience to its audience. The total growth reflected a 25% increase in total advertising revenue. We’re ending open-market third-party programmatic ad sales to our audience on Bloomberg.com, we’ve already introduced a new suite of first-party ad targeting products called Audience Accelerator
• Just months after launching, digital news startup Semafor has lost its climate editor due to its “over-dependence on Chevron sponsorship.”
• Washington Post considers selling tech business, Company has embraced digital experimentation under tech-billionaire owner; spinoff of ‘Arc’ business also possible
• Bari Weiss, the New York Times columnist turned independent newsletter writer, has hired ten full-time employees and over a dozen contractors to help build her new media company, The Free Press.
• Shares in BuzzFeed dipped to a new low of 95 cents yesterday, just a week after the firm announced 12% staff cuts that impacted roughly 180 staffers. Trading low consecutively could put BuzzFeed at risk of possibly being delisted from the Nasdaq. If BuzzFeed trades at less than $1 for 30 consecutive business days, it starts a long process that includes the Nasdaq sending a deficiency notice and offering a compliance period of 180 calendar days.
• The Arena Group, a publicly traded digital-publishing company, plans to acquire the digital assets of Men’s Journal and of Adventure Sports Network from Accelerate360 for $28.5 million. The deal gives Arena Group the rights to operate and monetize the digital brands of Men’s Journal, Men’s Fitness, Surfer, Powder, Bike, SKATEboarding, Snowboard and Newschoolers. The company said the acquisitions will help bolster not only its sports publishing arm but also its lifestyle vertical.
• The Wall Street Journal hopes to reach young news consumers on TikTok, joining a number of other legacy publishers working to reach Gen Z and young millennial audiences on the platform, where many of these consumers are getting their news.
• Vice Media is expecting to miss a 2022 revenue goal by more than $100 million, according to people familiar with the situation, a blow for the new-media company as it pursues a sale. The company presented a revenue target of over $700 million at an off-site with senior employees earlier this year. The expected shortfall would leave Vice with around $600 million in revenue for the year, roughly flat compared with 2021. The anticipated revenue miss comes as the company has been in talks for months to sell itself to Greek broadcaster Antenna Group.
• There have been nearly two dozen 24-hour work stoppages across newsrooms in the U.S. this year, according to NewsGuild president Jon Schleuss
• Michael Bloomberg, 80-year-old media magnate and former New York City mayor, is interested in acquiring either Wall Street Journal parent Dow Jones or The Washington Post

Ad Tech: What We Saw in Q4 2022

• Netflix struck deals with Integral Ad Science and DoubleVerify to provide outside measurement for the ads it plans to begin showing soon.
• GroupM, which has accelerated a variety of initiatives to begin using its media-buying clout — as well as its clients — to fight climate change and decarbonize the media industry, this morning unveiled a “Client Coalition” composed of more than 20 of its biggest clients to accelerate those efforts. The coalition, which represents nearly $10 billion in combined global ad spending, will unify their shared commitment to “accelerate the decarbonization of the world’s media supply chain,” the agency said.
• Marketecture, a new kind of vendor review platform that utilize the expertise of real industry practitioners to help you understand the complex world of technology and help you make better vendor decisions providing a level of detailed intelligence about marketing technology that is sorely needed
• The Trade Desk posted another very strong quarter, with revenue growth up 31% year-over-year, we continued to gain share as advertisers embrace the precision and relevance of data-driven advertising on the open internet, via our platform
• Yahoo and Taboola, announced a 30-year exclusive partnership that will create what the companies call a “contextual data powerhouse,” which will be important as the advertising industry retires browser cookies. The deal gives Taboola the reins to exclusively power native advertising across all of Yahoo’s digital properties and will be available for advertisers to buy media through the Yahoo demand-side platform (DSP). Taboola estimates that the deal will drive around $1 billion in revenue for the company. As part of the partnership, Yahoo will receive just under 25% of the pro forma equity of Taboola.
• Google says it has resolved an issue with its Ad Manager and that service was restored for users affected by a three-hour outage. The outage lasted until approximately 11 p.m. ET. Google apologized for the inconvenience. It is not clear if make-goods will be offered, although Google has done so for certain issues

Big Tech: What We Saw in Q4 2022

• Apple has revealed that its streaming music service now has 100M songs, representing a symbolic milestone
• TikTok is planning to build its own product fulfillment centers in the U.S., creating an e-commerce supply chain system that could directly challenge Amazon, as indicated by more than a dozen new job openings posted in the past two weeks to LinkedIn.
• ByteDance has begun talks with music labels about expanding its Resso streaming service globally to compete with industry leaders. The company wants the service to eventually be integrated with TikTok
• Roku is rolling out smart products including connected cameras, plugs and doorbells as part of a strategy to make its streaming devices into hubs for controlling the home.
• Nearly a year after Mark Zuckerberg rebranded Facebook as Meta, internal documents show the transition floundering.
• Kanye West, the controversial rapper who now calls himself Ye, has agreed in principle to buy right-wing social media platform Parler. The move follows his suspension from Twitter and Instagram
• The hottest app right now is Gas, where teens say nice things about each other
• Uber is letting marketers target ride-share passengers with ads based on where they’ve been and where they’re going. If a user books an Uber to a specific retailer, cinema or airport, for example, a company could buy ads centered on that location.
• Apple increased monthly and annual subscription prices for its streaming services Apple TV+ and Apple Music. It also raised prices for the Apple One bundle.
• Apple confirmed it will start selling ads in the main App Store screen. Apple will target these with the user data it tracks, while defining this as ‘not tracking’
• Apple’s software chief said advertising and privacy can coexist as iPhone changes rolled out more than a year ago continue to roil the digital-ad market.
• Apple is demanding a cut of social-media apps’ revenue from “boosts” and other forms of promoted posts.
• Spotify’s CEO, Daniel Ek, said he’d like to raise subscription prices in the U.S., as Apple Music and YouTube already have
• Meta Platforms will let go of 13% of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year as the Facebook parent battles soaring costs and a weak advertising market.
• TikTok is quietly entering the US e-commerce market, where it will compete with Amazon during the holiday shopping season.
• Google will pay $391.5 million to settle allegations by 40 states that the internet giant illegally tracked users’ locations.
• YouTube is introducing shopping features to the video site, seeking to diversify revenue streams during a slowdown in advertising.
• The U.K.’s competition regulator is moving forward with an investigation into Apple and Google’s mobile market power
• TikTok CEO Shou Chew said the platform is taking greater steps to secure user data and that it needs to invest more in protecting young people from getting exposed to harmful content.
• New Zealand said it would seek to require tech giants like Google and Meta Platforms to pay news publishers for content
• Facebook warns it could ban news in the US if Congress passes a bill that would require the platform to negotiate with and compensate publishers for their content.
• Microsoft has considered building a Tencent-style “super app” combining shopping, messaging, news, search and other services.
• Twitter will relaunch its Twitter Blue services with tiered pricing, charging $11 a month for users who sign up through Apple iPhones, versus $8 a month if they subscribe through the web. Twitter did not say why there were two different prices. The premium is likely a reflection of the 30% cut that Apple takes.
• Congress introduces bipartisan legislation to ban TikTok in US Some in Congress are calling for a cease to US TikTok activity. Governmental efforts to halt the use of TikTok in the U.S. are gaining serious momentum
  For the first time since 2014, Google and Meta’s share of total digital ad spend has dropped below 50%. This year, the duopoly will account for 48.4% of US digital ad revenue, a roughly six-point drop from their combined peak in 2017. Although Google and Meta are both facing more competition for ad dollars on multiple fronts, Amazon, which now has a $30 billion ad business, is their biggest rival.
• TikTok is launching a new feature that allows users to see why a particular video was recommended to them in their For You feed, the company announced. The new feature is designed to bring more context to content recommended in For You feeds.
• Google executives declared ChatGPT, the popular A.I. chat bot, a “code red” threat to the tech giant’s core search business. Over the past three decades, a handful of products like Netscape’s web browser, Google’s search engine and Apple’s iPhone have truly upended the tech industry and made what came before them look like lumbering dinosaurs. Recently , an experimental chat bot called ChatGPT made its case to be the industry’s next big disrupter. It can serve up information in clear, simple sentences, rather than just a list of internet links. It can explain concepts in ways people can easily understand. It can even generate ideas from scratch.
• Goldman Sachs extended a partnership with Apple as part of its revamped approach to consumer banking. The partnership reflects Goldman’s revamped approach to consumer banking, a business it launched a few years ago to great fanfare that has yet to turn a profit. The bank has abandoned plans to build a full-service consumer bank in favor of providing banking services to wealth-management customers and through partnerships with companies such as Apple.

Streaming Services & Platforms: What We Saw in Q4 2022

• Amazon has been doubling down on original content for Freevee, its ad-supported video service, which has seen a lot of growth thanks to a deep integration with other Amazon properties.
• Warner Bros gaining on Netflix with HBO Max, HBO Max is gaining ground on Netflix in a new analysis of the US streaming wars. “HBO has benefited from ‘House of the Dragon.'”
• Showtime chief’s departure signals Paramount is moving forward on its plan to merge streaming services
• Tubi announced it has expanded its linear FAST channel offering to over 200 live news channels
• Apple is considering following other video streaming services in introducing an ad-supported tier, a sign that the iPhone maker wants to generate more revenue from its service Apple
• The Los Angeles Clippers introduced a streaming service carrying six different feeds of the team’s games.
• Amazon to offer first ‘Black Friday’ NFL game — The NFL says Amazon Prime Video will stream a game on the day after Thanksgiving next year. “We could treat it like a Super Bowl.”
• ESPN sold its majority stake in the X and Winter X Games, marking the end of a nearly three-decade chapter during which the network helped propel snowboarding, skateboarding and other action sports out of the fringe and into the mainstream.
• Amazon to Unveil Daily Talk Shows on Sports
• In its effort to become a full-time destination for sports, Amazon will have its own lineup of daily talk shows from morning to night.
• YouTube announced “Primetime Channels,” a new storefront hub featuring 34 subscription streaming services available directly on the platform, including Paramount+, Showtime, AMC+ and Spanish-language Vix+.
• Jeff Bezos is “looking into buying” the Washington Commanders after owners Dan and Tanya Snyder revealed sale interest.
• Warner Bros. Discovery is speeding up the launch of a combined HBO Max/Discovery+ streaming service, now planning on a spring launch.
• Apple is said to be building an advertising network for live television as part of its deal to stream Major League Soccer games.
• Netflix is warming up to the idea of offering live sports on its platform—as long as it can do so without breaking the bank, according to people familiar with the discussions. The company recently bid for the streaming rights for the ATP tennis tour for some European countries, including France and the U.K., but dropped out, one of the people said. It also discussed bidding for a series of other events including U.K. rights to the Women’s Tennis Association and cycling competitions
• The returned Disney CEO Robert Iger told employees in a companywide town hall that he will empower creative teams and emphasize profitability over growing subscriber numbers at Disney+.
• Disney has taken full control of BAMTech, a video-streaming firm spun off from Major League Baseball’s digital media company MLB Advanced Media. Disney earlier this month purchased the remaining stake in BAMTech from Major League Baseball for $900 million. Previous to the transaction, streaming technology services provider BAMTech was owned 85% by Disney and 15% by Major League Baseball (MLB).
• Netflix to let tens of thousands of subscribers give early feedback on content — expansion of program that helped make ‘Don’t Look Up’ less serious
• The number of paid Peacock paid subscribers tops 18 million, up from the 15 million reported at the end of 3Q22
• Warner Bros. Discovery plans to merge its HBO Max and Discovery+ streaming services in the spring. the name executives have chosen for the service, “Max,”. The platform will feature hubs for content from HBO, Discovery, DC Comics and others.
• Millions of US Disney+ subscribers are getting the option to pay the same price for an ad-interrupted streaming experience, as the platform introduces a change to its subscription plans. The ad-free experience will increase to $10.99 a month from its current $7.99 price tag, the cost of the ad-inclusive subscription.
• Netflix lets advertisers take their money back after missing viewership targets. Netflix is falling short of ad-supported viewership guarantees made to advertisers and allowing advertisers to take their money back for ads that have yet to run. The specific shortfall amounts vary by advertiser, but in some cases, Netflix has only delivered roughly 80% of the expected audience
• Google’s YouTube in talks for rights to NFL Sunday Ticket, DirecTV currently pays for rights to subscription package that allows football fans to watch most Sunday afternoon games
  Argentina’s nail-biting penalty shot victory over France to win the 2022 World Cup on Sunday drew an average of close to 26 million viewers, including a record-setting English language audience for Fox that capped a better than expected ratings performance for the tournament. The figure from Nielsen is up 47% over the 2018 World Cup final between France and Croatia.
• Subscriptions to ESPN+ have hit 24.3 million, up from 17.1 million at year-end 2021, as predictions of a spinoff by parent Disney continue.

E-Commerce Companies: What We Saw in Q4 2022

• H&M is considering charging fees for online returns as the number of refunds rise by 30%.
• Roku is rolling out smart products including connected cameras, plugs and doorbells as part of a strategy to make its streaming devices into hubs for controlling the home.
• Kroger said it is buying rival Albertsons in a deal that values the company at $24.6 billion, one of the biggest deals in the history of the grocery industry in the US
• Amazon is adding Venmo as a new payment option for its customers ahead of Black Friday and the holiday season.
• Online retailer Shein is on track to generate revenue of $24 billion this year, according to people close to the company, putting it within striking distance of the world’s largest fast-fashion giants—just a decade since its founding.
• Retailers this holiday season are focusing on delivering packages to customers on specific dates, rather than competing on speed of delivery.
• According to the latest Adobe Analytics figures, consumers will spend between $11.2 billion and $11.6 billion on Cyber Monday, Nov. 28, making it the biggest online shopping day of the year (and of all time). This is a slight upward revision from the previous Adobe Analytics estimate of $11.2 billion in Cyber Monday online sales.
• Trader Joe’s topped MBLM’s 12th annual Brand Intimacy Study (in the retail category), with a brand intimacy quotient score of 59.9. Costco came in second with a score of 57.5. Rounding out the top five were H&M (57.2), Amazon (55.7) and Whole Foods Market (54.2).
• Apple has reduced its exposure to China in its supply chain as it has increased reliance on India, Vietnam, Taiwan and the U.S. An analysis by Reuters of the iPhone-maker’s supply chain showed that China’s share has fallen to 36% of the primary location for suppliers’ production sites in 2021. That figure was 41% in 2020.
• Dollar General’s third-quarter sales rose 11.1%. The discounter remains committed to expanding its footprint, with plans to execute approximately 3,170 U.S. real estate projects in fiscal year 2023 (ending Feb.2, 2024), including 1,050 new stores, 2,000 remodels, and 120 store relocations. Dollar General ended the quarter with 18,818 stores in 47 states.
• Five Below reported a better-than-expected third quarter during which it continued to expand its footprint. The tween and teen extreme-value retailer opened 40 new stores across 20 states in the quarter, finishing with 102 new stores opened year to date. In addition to entering new markets, Five Below opened its third Manhattan location, in Times Square. Five Below has one of the most aggressive expansion programs in specialty retail. In March, the company said it was increasing its store potential in the U.S. from 2,500-plus to 3,500-plus locations, In contrast to many other retailers, Five Below did not see its sales soften as the third quarter wound down.

web3 & Crypto Markets: What We Saw in Q4 2022

• ESPN is close to striking a large partnership with sport-betting giant DraftKings.
• Some people who bought NFTs from CNN feel burned after the network pulled the plug on the project.
• Most visitors to Horizon Worlds, the flagship metaverse offering from Meta Platforms, generally don’t return after the first month.
• Warner Bros. Discovery is introducing an NFT project based on “Game of Thrones.”
• ESPN chief Jimmy Pitaro says the network is exploring a deeper push into sports betting, clouding a possible tie-up with DraftKings.
• The iconic toy retailer Toys “R” Us, announced on that it has partnered with Web3 technology agency Anybodies to officially bring Toys “R” Us into the metaverse with the release of 10,000 digital collectibles.
• Starbucks opened its blockchain-based loyalty program and NFT community, Starbucks Odyssey, to the first batch of U.S. beta testers.

Insights provided by Matthew Scott Goldstein, from his Quarterly newsletter “What I Saw Happen“