What I’m Hearing: Desus & Mero’s Implosion, Netflix’s Smoke Screen, and UTA’s Value

Hello and welcome back to What I’m Hearing.
‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Hello, and welcome back to What I’m Hearing.

Two huge announcements today. First, I’m going on vacation. Like, a real one, not where I torture my family by taking calls at dinner and disappearing to write. Puck’s legal expert Eriq Gardner will be here Sunday with an exclusive report, and streaming analyst Julia Alexander will have a deep dive on the next big M&A opportunity in entertainment.

Speaking of Julia Alexander… she’s the other big announcement. Julia is director of strategy at Parrot Analytics and has written guest columns for Puck (including below on Netflix), and I’m happy to reveal she’s now a regular contributor, writing weekly about the streaming wars. Think of her column as an extension of What I’m Hearing, because when I’m back from my week off, that’s exactly what it will be. She’s calling it What I’m Hearing+ (get it?), and it will post on Tuesdays. You’ll receive WIH+ as a Puck member, and you can opt out if you prefer to be uninformed about the video consumption trends that are increasingly defining the entertainment industry. No biggie.

So, welcome to Julia, thank you to Eriq, and after today, I’ll see everyone a week from Sunday.

Let’s get started…

Thursday Thoughts…

Massive valuation for UTA: If Jeremy Zimmer and the rest of the United Talent Agency sharks are grinning a bit wider these days, it’s because the company is now worth $2.5 billion. That’s the new valuation, I’m told by three sources, after a nearly $800 million investment by the Swedish private equity firm EQT that I wrote about last week...

P.S. As a reminder, you're receiving the free version of What I’m Hearing at . For full access to Puck, and to each of my colleagues, you can subscribe here.

LEARN MORE

R.I.P., Netflix Narrative

Reed Hastings still wants investors to think of the streaming pioneer as separate from “legacy” media, but with its muted subscriber projections and an advertising pivot, it’s now a mature, slow-growth company.

MATTHEW BELLONI

It’s funny, talking to a few people at Netflix this week—both before and after the Big Reveal—there was a sense of indifference about the subscriber numbers. Wall Street and the media might have whipped up the Tuesday earnings report as a referendum on the entire entertainment industry, the most important data drop in the history of streaming. But the people who actually make the Netflix content seemed, from my admittedly small sample, to be a bit numb to the hoopla. Down 970,000 subs last quarter—“less bad,” in co-C.E.O. Reed Hastings’s words, than the Netflix-created benchmark of minus 2 million. OK… great? A projection of 1 million subs added next quarter? That would reverse six months of losses and restart the Netflix growth machine—put the Dom on ice, right? Yet that’s nowhere near pre-2022 projections, and it’s a fraction of the growth rate of rival streaming services. So… maybe the champagne should be Mumm’s instead.

Yay Netflix, boo Netflix; it’s hard not to feel like this is all just a slight variation on the same theme: Netflix is now a slow-growth company. Profitable, yes, with great content, a commitment to working with the best artists, and an amazing 220 million subscribers to consume it all. But its rocket-ship trajectory and $200 billion in market value have gone poof, meaning it’s basically a—gasp—legacy media enterprise that, at least for the foreseeable future, must operate in many ways like the media peers it disrupted, whether Hastings will say that publicly or not...

SUBSCRIBE TO CONTINUE