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The Bottom Line
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Your essential guide to global business and technology
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Amateurs are beating Hollywood at its own game | | |
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Do you watch YouTube? The question is almost like asking if you use the internet: some 2.5bn people access the platform every month, dwarfing any other video app. More interesting is the question of how you watch it. When YouTube was founded, nearly 20 years ago, viewers tuned in via computer monitors. Then they moved to smartphones. Today, people increasingly watch YouTube on their television. In America, nearly half of all YouTube viewing takes place on a TV.
If you are someone who still uses YouTube mainly for short how-to videos on getting stains out of carpets or putting together Ikea furniture, this may come as a surprise. But audiences are treating YouTube ever more like television, now that its little red app appears on their TV set’s menu alongside those of Netflix, Disney and so on. As I describe in
this week’s story,
this is putting the social-media company into direct competition with old-fashioned media firms—and it seems to be giving them a run for their money.
This
same thing is happening across the media,
as distribution channels open up to everyone. Selling music used to require pressing discs and delivering them to record stores, something few people could do without the help of a record label. Today streaming platforms like Spotify add more than 100,000 new tracks per day, the vast majority recorded by amateurs in bedrooms and garages. You and your kazoo can use the same distribution platform as Taylor Swift and Universal Music Group.
Or take video-gaming, where distribution once meant manufacturing discs or cartridges and selling them in boxes. Today games are shared online, via app stores such as those run by Apple and Google, or simply on the open internet. Wordle, a game made by one man to amuse his girlfriend, was being played by 45m people a few months after its launch. Distribution was no barrier to its adoption.
Our own corner of the media business is no different. Not so long ago, news was passed around on paper, which provided a nice protective moat for the organisations with the wherewithal to print and deliver it. Today, the article you are reading has been distributed by email, a channel open to everyone at almost zero cost. The moat has been drained: publishers like The Economist have been thrown into competition with anyone with a Substack account.
Old media still possess advantages: Netflix and Taylor Swift are not going anywhere just yet, and we hope to stick around for a while longer too. But the protection once offered by limited distribution has gone. Today, everyone competes on content—and audiences are better off for it.
Please write to us with your thoughts at:
thebottomline@economist.com.
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Fast fact: YouTube’s ad-free “premium” tier has more than 100m paying subscribers, more than many Hollywood streamers including Max, Paramount+ and Apple TV+. | | |
Your preview of next week | | |
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Monday September 30th
Carnival Cruises’ earnings are expected to reflect the “strong bookings momentum” it forecast in June. The cruise-line industry is still buoyant despite waning post-pandemic travel demand elsewhere. Carnival’s share price has endured waves of peaks and troughs to dock roughly where it was at the start of January.
Industrial production in Japan rose by 2.9% in July on an annual basis, the most since May last year. August’s figures are released.
Roche holds an investor day and presents its latest strategy. The drugmaker’s share price tumbled recently when it emerged that most of the participants in trials of its new weight-loss drug had experienced vomiting.
Tuesday October 1st
Canada imposes a 100% tariff on Chinese-made electric vehicles. Next, a 25% levy on Chinese steel and aluminium imports will come into effect on October 15th.
Markets will look to the euro area’s inflation estimate for September as a pointer to the European Central Bank’s next move on interest rates. The annual inflation rate eased to 2.2% in August, the lowest since July 2021.
Nike announces its first quarterly earnings since replacing John Donahoe as chief executive with Elliott Hill, a Nike lifer who retired in 2020. Mr Hill is already up and running, tackling a decline in sales that saw Nike’s stock plunge by 20% following its last earnings report, on June 28th.
Wednesday October 2nd
JD Sports’ stock also fell amid the Nike turmoil, but rose again after reporting a jump in sales for the second quarter. The British sportswear retailer and FTSE 100 company publishes its results.
Levi Strauss also reports. The jeans-maker’s earnings may have been affected by political upheaval in Bangladesh, where it has 33 production facilities.
Thursday October 3rd
Tesco is bringing artificial intelligence to its aisles, with a programme that will tell enrolled shoppers that they have purchased too many salty items, for example, or suggest how they can save money. The supermarket chain presents its results.
Constellation Brands will record a charge of up to $2.5bn related to the write-down of the value of its wine and spirits business when it declares earnings. The drinks company’s overall sales are booming, however, thanks to the popularity of its beer brands, which include Corona Extra and Modelo Especial.
Friday October 4th
Springer Nature is expected to float shares on the Frankfurt exchange. The academic publisher’s stockmarket debut is being closely watched as a test of investor-appetite for IPOs in Europe.
Figures on America’s jobs market are updated for September. The monthly release on American jobs has overtaken inflation as the most important indicator for investors, according to analysts at Bank of America.
J D Wetherspoon’s 12-month results are expected to come in at the top end of market expectations. Tim Martin, the ebullient chairman of the British pub chain, reports surging demand for traditional ales. “The gods of fashion have smiled upon Guinness,” he notes. The black stuff, long a favourite tipple of older drinkers, is now popular with hipsters. | | |
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The competition to be the worst two words in the English language is extremely hard-fought. Surprise party. Cruise holiday. Rice pudding. Keen golfer. The list goes on and on. But right up there is “sandwich lunch”. Separately, each of these words contains lots of promise. In combination they spell unmitigated disaster. | | | |
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