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Not the OP, and this is just speculation on my part so take it with a grain of salt. Meta gets the overwhelming majority (97.7%) of their revenue from advertis
by vaiso 4y ago
Not the OP, and this is just speculation on my part so take it with a grain of salt.
Meta gets the overwhelming majority (97.7%) of their revenue from advertising[1]. Their business model is completely reliant on using user data to sell highly targeted ads to sellers. While most consumers don't actually care what corporations do with their data, governments have been starting to crack down on the types of data that can be collected, and what it can be used for, especially with GDPR in the EU. The less data Meta can collect, the worse their targeted advertising will be, and fewer sellers will be willing to pay - or pay as much - for ads on their platforms. As it is, many companies are moving more towards influencer sponsorship for advertising, cutting platforms like Instagram out of the cost entirely.
The problem is that all of Meta's eggs are in one basket, and that basket's bound to drop. Most other big tech companies have more diverse revenue sources, and so are more robust.
That being said, I disagree with the premise - Netflix is probably going to the first FAANG company to fold.
[1] https://investor.fb.com/investor-news/press-release-details/2022/Meta-Reports-Second-Quarter-2022-Results/default.aspx https://investor.fb.com/investor-news/press-release-details/...
- treis 4y agoThey're still a dominant player in a 2 sided market. They still have traffic (within their site + ad network) and buyers (people wanting to place ads). Even if we remove all user tracking and nuke all attribution they're still going to make a lot of money. It will shift to more national type ad campaigns and/or targeting based on page content.
- lotsofpulp 4y ago> Netflix is probably going to the first FAANG company to fold Why would Netflix go out of business? Are they overly burdened by debt?
- lordnacho 4y agoMuch stronger competition in the streaming space. Disney has better content for every family with kids, so they're first choice. Amazon already has people via Prime. How many more are you going to buy? Possibly one, small chance of two? You've got Netflix and all the others scrambling for that last space in the house. Plus they don't seem to be able to make a hit show of the kind that gets subscriptions, just a lot of not too terrible content.
- lotsofpulp 4y agoSure, but I do not see why that would cause bankruptcy. Their market cap would shrink, but unless they are over leveraged, they should be able to continue operating without “folding”.
- lordnacho 4y agoIt's not necessarily the case that the company goes bankrupt, it just sort of goes sideways forever. At some point someone will get the brilliant plan of borrowing in order to invest in relaunching the company.
- Fire-Dragon-DoL 4y agoThis is interesting. As a parent, we have Netflix, not Dinsey+. See, children love to re-do things over and over, same for tv, my children want to watch wreck it ralph and moana for 100 times. So, buy one of those "disney classics" bundles and you are good for a long chunk of time. Netflix covers the adults. That's my feeling at least, I don't like a single adult show from disney.
- yamtaddle 4y agoWithout the momentum of subscribers who just haven't bothered to unsubscribe, I suspect they'd already be dead. Like, if they had to acquire those same users fresh, today, I don't think they could.