Out With the Old and In With the…Old?

Netflix launched its first streaming service “Watch Now” in 2017, making it a pioneer of a nascent but promising industry. Over the ensuing decade, Netflix racked up tens of millions of subscribers and raced to a $200+ billion market cap….

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Netflix launched its first streaming service “Watch Now” in 2017, making it a pioneer of a nascent but promising industry. Over the ensuing decade, Netflix racked up tens of millions of subscribers and raced to a $200+ billion market cap.

More than a decade late to the party, many analysts dismissed linear-TV players like ViacomCBS and Discovery as unlikely to be competitive in the new streaming paradigm.

But over the last twelve months, it’s the dinosaurs that are out front.

The Wheel Keeps on Earning

Neither Discovery nor ViacomCBS has reinvented the wheel.

For ViacomCBS, which launched Paramount+ earlier this month, the playbook has involved bringing back 90s hits like Frasier, The Real World, Beavis and Butt-Head and Rugrats with revivals.

Discovery, which launched Discovery+ at the start of the year, has doubled-down on its bread-and-butter content that worked on traditional TV — think outdoor survival and home improvement. CEO David Zaslav described its library of existing content as a “yellow brick road for us.”

That road has certainly led one way: up.

  • Discovery’s stock has climbed over 250% over the last year and it now boasts a $32 billion market cap.
  • ViacomCBS shares have climbed more than 600%, and its market cap stands at a mighty $60 billion.

According to Morgan Stanley, ViacomCBS now trades on par with Netflix at 20 times its projected 2024 earnings.

the takeaway

You might not be able to teach an old dog new tricks, but sometimes you don’t need to.

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