Strictly Business Daily Variety – Profits or Bust: What to Expect for Media and Entertainment in Q4 and Beyond
Oct 30, 2025
Naveen Sarma, Managing Director and U.S. media & telecom sector lead at S&P Global, shares valuable insights into the ever-evolving media landscape. He discusses the impact of high consumer demand for content on sector stability amid monetization challenges. AI's potential savings in production also come under the spotlight, along with Netflix's dominant role in streaming profitability. Additionally, Sarma evaluates Disney Plus's international growth prospects, advertising trends, and the implications of interest rates on M&A activity in the media sector.
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Content Demand Is Stable But Fragmented
- Consumers' appetite for content remains extremely high across film, TV, music, games, sports, and user-generated content.
- Fragmentation of attention and lost multi-platform monetization keep profitability under pressure.
Streaming Hasn't Restored The Old Monetization Matrix
- The old matrix monetization (theatrical, TV, syndication) hasn't been fully restored by streaming.
- Declining linear-TV margins mean streaming profits must scale before companywide margins recover.
AI Savings May Be Reinvested, Not Yet Visible
- AI promises production savings in pre- and post-production, but firms may reinvest savings into more content or talent.
- Measurable bottom-line margin improvement from AI may appear over the next couple of years.