Ads, AI, M&A: Q2 earnings recap for media companies

Second-quarter earnings brought some major deal news:

• Lionsgate's acquisition of eOne
• Paramount's sale of Simon & Schuster
• Dish's merger with EchoStar
• ESPN's deal with Penn Entertainment

The big picture: Beyond M&A, some other themes stuck out, notably the ad market seems to be improving, artificial intelligence is top of mind, and media companies remain focused on profitability. Here's a look at the landscape:

Tech

• Alphabet: YouTube's ad revenue bounced back. After three consecutive quarters of decline, it reported a 5% increase from a year ago to $7.7 billion.
• Meta: Ad revenue for Facebook parent Meta exploded, up 16% compared to the prior year, leading to overall revenue growth in the quarter after — again — three consecutive quarters of decline.
• Spotify: Audio advertising rebounded with the Stockholm-based audio giant reporting 12% growth year-over-year.

Entertainment

• Netflix: Its ad-supported tier and password-sharing crackdown are working, so much so that it is axing its cheapest ad-free subscription tier in the U.S. and the U.K.
• Disney: Bob Iger seemingly got wind of the financial benefits of a password-sharing crackdown, saying Disney+ will explore that option next year.
• Lionsgate: The separation of its studio and streaming businesses is delayed until early 2024, with CEO Jon Feltheimer citing the eOne acquisition and the strike's impact.

Publishers

• New York Times: The Athletic's losses are decreasing, down 38% to $7.8 million this quarter compared to the prior year, as it boosts advertising there and folds the Times' sports department.
• BuzzFeed: The company is still struggling after receiving a delisting notice in June, having missed its estimates. CEO Jonah Peretti touted AI investments with AI-generated quizzes, games and chatbots.
• News Corp.: CEO Robert Thomson said his company is in discussions with AI companies, as he argued these platforms are "fatally undermining journalism."