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The Medium's New Market Alignment Test
Paramount Skydance's big opportunity to be Aligned “with Red Pill” and “Blue Pill” marketplaces while Disney is stuck in Neutral and NBCUniversal (and everyone else) is Misaligned
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[Author’s Note: First, Monday’s essay went out to paid subscribers, only, due to a technical error on Substack’s end. You can read a free preview of the essay here.
Second, I am testing new copy for the About section and the tagline over the next few months. As you may have noticed, the “Red Pill” and “Blue Pill” marketplaces capture the emerging market dynamics between IP holders and the disruption emerging from generative AI tools I am headed towards diving deeper into this dynamic of “misalignment”, as you will read below.
I’d welcome your thoughts on how this aligns with the challenges you are seeing in your industry.]
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At this moment of disruptive chaos and change in the media marketplace—and with 1.2 billion new consumers set to access the internet for the first time by the end of 2026—it is worth thinking more about which IP owners will be aligned with this future, and which ones will not.
“Misalignment” has been inherent to the theme of my past essays, and core to my column on The Information. C-Suite legacy media executives have fundamentally misunderstood Marshall McLuhan’s “The medium is the message”. More succinctly, as one gaming executive told me in 2023, “They aren’t gamers”—their promises to find growth in gaming and direct-to-consumer models invite reasonable skepticism.
Paramount Skydance CEO David Ellison is promising investors that the company will emerge from this moment as “the most technologically capable media company”. His implicit business objective is alignment.
Unlike other legacy media executives, Ellison is “a studio executive with proven digital media experience”, having made streaming deals and ran gaming division Skydance Interactive. However, he is not a software executive and nor is anyone else in the C-Suite—Cindy Holland, the Chair of Direct-to-Consumer segment, is the only member of leadership with executive experience in the DTC space (Netflix).
What does the outcome of alignment look like under these managers?
There are three broad outcomes:
Aligned: Early adopter ready to partner, invest, or acquire, DTC-or-gaming-savvy management in the C-Suite
Neutral: “One foot in”, wait-and-see approach, move when peers validate success, also litigate
Misaligned: View AI and creator economy as existential threat, will sue or protect IP aggressively, actively impede DTC-savvy management from assuming C-Suite responsibilities.
There are “Blue Pill” and “Red Pill” marketplace versions within these outcomes, too.
Aligned
Aligned: Early adopter ready to partner, invest, or acquire, DTC-or-gaming-savvy management in the C-Suite
On Monday, I outlined what alignment should look like for the outcome of Paramount Skydance as “the most technologically capable media company”.
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In the “Blue Pill” marketplace—where closed distribution models like theatrical and streaming are fundamental to the business model—alignment means “being smarter than his predecessors about producing IP and building DTC experiences that resonate with consumers at scale.”
Past essays related to today’s analysis:
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