How Future IP Investments Will Super-Serve Under-Served Audiences, Like the 40% of Non-Whites

January 27, 2022 by  Andrew Cohen


Executive Summary

  1. Context: The State of the “IP Wars” — Shifting consumption habits across video and audio have triggered the “IP Wars”: A battle for market share, using IP as the weapon of choice .
  2. Prediction: The “IP Wars” Will Evolve to Prioritize Specialized Creators that Super-Serve Distinct Communities — There will be outsized investments in studios, production companies, and talent that can help platforms acquire and retain multicultural audiences and passionate affinity groups.
  3. Underrepresented Communities — As the race to acquire new users escalates, reaching the 40% of non-white US consumers will become a top priority for both video and audio streaming platforms.
  4. Passionate Affinity-Groups — Eight of the top-10 most-watched cable networks have a niche programming focus. Platforms will partner with and acquire creators that cater to passionate communities within distinct category verticals, as a means of enhancing reach and stickiness.
  5. Conclusion: Specialized Content Creators Will be Medium-Agnostic Specialized content creators will maximize the value of their communities by diversifying their audience touchpoints across mediums. Film and TV studios will expand into audio, and vice versa.

Context: The State of the “IP Wars”

Shifting consumption habits across video and audio have triggered the “IP Wars”: A battle for market share, using IP as the weapon of choice.  

We’re in the midst of not one, but two, once-in-a-generation paradigm shifts: the “Streaming Wars” and the “Audio Wars”. 

The best way to explain the guiding thesis of these industrial battles is to paraphrase a quote often attributed to Wayne Gretzky: ‘Don’t skate to where the puck is, skate to where it’s going to be’.  

In both video and audio, the puck is flying towards a future that’s defined by streaming. The OTT video market is projected to be worth $218 billion by 2026 (a 19% CAGR from 2020). onthly podcast listenership is expected to hit 164 million by 2023 (a 41% increase from 2021), and podcast ad revenues are expected to reach $2.2 billion (a 120% increase from 2021). 

As these new industrial frontiers are becoming clearer on the horizon, the major players are racing to lay claim to this real estate. 

As a result, both industries are undergoing “land grab” spending sprees, operating on a simple principle: Spend aggressively on IP and talent that will attract and retain audiences in an effort to win market share today, while each market is in its formative stage and consumers are developing their routine. Those who do this successfully will become the default destination for generations to come, when the market is fully matured. 

The “Streaming Wars” and the “Audio Wars” are combining to form the “IP Wars”, where the key to winning the future is winning the fans. And the key to winning the fans is providing exclusive access to the content they love most. 

A few deal highlights…

OTT Video

  • M&A
    • AGBO: Sold a minority stake to Nexon at a $1.1 billion valuation (Jan ‘22)
    • Moonbug Entertainment: Acquired by Candle Media for $3 billion (Nov ‘21)
    • Roald Dahl Story Company: Acquired by Netflix for $686 million (with a billion-dollar planned production spend behind it) (Sep ‘21)
    • Hello Sunshine: Acquired by Candle Media for $900 million (Aug ‘21)
    • MGM Studios: Acquired by Amazon for $8.45 billion (27.5x EBITDA) (May ‘21)
  • Talent and Creator Output Deals:
    • ViacomCBS / South Park Studios: $900 million (Aug ‘21)
    • Netflix / Shondaland (Shonda Rhimes): $400 million (Jul ‘21)
    • WarnerMedia / Bad Robot Productions (J.J. Abrams): $250 million (Sep ‘19)
    • Netflix / Ryan Murphy Productions: $300 million (Feb ‘18)


  • M&A
    • Amazon acquired Wondery for $300 million (Dec ‘20)
    • SiriusXM acquired Stitcher for $325 million (Jul ‘20)
    • Between 2019-2020, Spotify spent $850 million on podcast-focused M&A (Gimlet, Anchor, Parcast, Ringer, Megaphone)
  • Talent / Creator Deals
    • Amazon signed the Smartless podcast to an $80 million deal (Jun ‘21)
    • Spotify signs Call Her Daddy to a 3-year $60 million deal (Jun ‘21)
    • SiriusXM signed Howard Stern to a 5-year deal worth $500 million (Dec ‘20)
    • Spotify signed Joe Rogan to an exclusive distribution deal for $100 million (May ‘20)


Prediction: The “IP Wars” Will Evolve to Prioritize Specialized Creators that Super-Serve Distinct Communities

There will be outsized investments in studios, production companies, and talent that can help platforms acquire and retain multicultural audiences and passionate affinity groups. 

This strategy makes sense. In the early-stages of an exploding market, leading platforms that are battling for future market share seek to acquire audiences at scale.

But, for both video and audio, there are very few independent, mass-market players that are still on the market. 

So once the big players are all snatched up, and the land grab is still unsettled, what’s next? Where will the top content buyers turn next to broaden their audience? Where will investors deploy capital to exploit the outsized value of content-sellers in the midst of this monumental paradigm shift?

This land grab is far from over. We don’t expect the deal flow to disappear in 2022. However, we do expect it to evolve.

We expect both streaming and podcast platforms will:

  1. Expand their audience acquisition efforts beyond “core” consumers and into underserved communities (e.g. BIPOC, LatinX, AAPI, Women, Gen-Z, etc)
  2. Generate incremental audience reach, while increasing platform stickiness and deepening monetization by onboarding passionate affinity-groups (e.g. sports fans, true crime fans, kids & families, etc.)

These two goals share one solution: specialized content creators dedicated to valuable niche verticals.


Underrepresented Communities

As the race to acquire new users escalates, reaching the 40% of non-white US consumers will become a top priority for both video and audio streaming platforms.

As future phases of the “Streaming Wars” and “Audio Wars” unfold, the consumption preferences of early adopters are all but cemented. Therefore, the high-growth demographics will become increasingly valuable targets for customer acquisition. As a result, platforms are increasingly focused on providing inclusive storytelling with diverse representation, so that consumers from all backgrounds can find programming that brings them onto these platforms and keep them there. 

Some key stats:

  • Non-white consumers account for about 40% of the US population, and that number is steadily increasing. 
  • The share of eyes, ears, and wallet that this cohort represents isn’t merely incremental… it’s essential. In fact, the buying power of non-white consumers has grown by 555% since 1990 (from $458 billion to $3 trillion). 

No platform will win its respective “land grab” without this 40%. So, as the initial target audience is all but acquired, the next phase of the “Streaming Wars” and the “Audio Wars” will be focused on multicultural audience expansion.

And just like in the first wave, this means acquiring the talent and IP that will connect with the target consumer. The process won’t change, the target audience will. Which means the investment targets will too. 


OTT Video

Private equity funds poured billions into studios and production companies in 2021, because as the “bullet makers” in the “Streaming Wars”, these companies are more valuable than ever before. These investors are projecting high ROI’s because as the “Streaming Wars” escalate, the price tags for content deals will continue to escalate as well. In the near-term, we think Private Equity firms will continue to acquire and consolidate production companies to increase the value of their holdings to prospective streaming partners. And then over the next 2-3 years, we believe that Private Equity companies will sell these assets for an outsized premium when the content buyer-verse expands even further.

The flow of investment capital from private equity funds will mirror the capital flow from the major content buyers (aka the streaming platforms). 

And we believe that in 2022, content spends will be redirected towards talent and IP that can help them reach new multicultural demographics…

BIPOC audiences over-index on streaming. Despite making up 13% of the US population, they make up 39% of viewership on Tubi, 36% on Pluto TV, 22% on The Roku Channel, 18% on Amazon Prime Video, 17% on Hulu, and 15% on Netflix…yet, less than 5% of the leading actors on streaming shows are black. 

So it’s no surprise that a recent study estimated that the film and TV industry could unlock an additional $10 billion in annual revenue (a 7% increase) by “addressing the persistent barriers around diversity and representation”…not to mention, it’s the right thing to do!

This gap in the market has enabled the emergence of niche streaming platforms like Tyler Perry’s BET+, which reached 1.5 million paid subscribers in its first 18 months, and Univision’s upcoming Spanish-language streaming service, which it’s launching after spending $5 billion to acquire Televisa for its IP library and capabilities (the service will feature 46,000 hours, including 30 original shows, in its first year).

This increased demand is already leading to a surge of investments in supply, via new production companies that focus on expanding representation through storytelling. 

ViacomCBS partnered with Kenya Barris and others to launch BET Studios, which provides equity ownership to Black creators across premium TV and film content. MACRO, a film studio with the stated mission of the voice and perspective of people of color in film and media, recently raised $150 million. In 2020, Lebron James’ Springhill Entertainment raised capital at a $725 million valuation to support its mission of creating content that empowers black creators and audiences. And earlier this year, Carmelo Anthony launched a production company focused on “inclusive storytelling”. 

As the streaming land grab expands, we expect these production companies to become increasingly valuable. Therefore, we predict that private equity companies will soon begin acquiring more studios with a specific focus on the demographics that have long been overlooked by Hollywood. And in order to position themselves for returns on those exits, we predict that venture and growth funding will start pouring into those spaces in the near term as well.  



Similarly, podcast providers need to find new audiences. Luckily for them, multicultural consumers love podcasts. 

43% of podcast listeners are non-white. Given that less than 40% of the US population is non-white, that means podcast over-indexes on diverse audiences. And the growth of these audiences are dramatically out-pacing the growth of white listenership.

  • Hispanic podcast audiences have grown 6x over the past nine years
  • BIPOC and Asian listenership has grown 5x over the past nine years
  • By comparison, white audiences have only grown by 17% over the past six years 

We believe this represents an enormous opportunity. Although the big-ticket deals with the Rogan’s, Gimlet’s, and Wondery’s of the world were a logical first step towards solidifying market share, continuing to double down on the same saturated audience segment will soon begin to yield diminishing returns for content buyers. 

Therefore, we believe we’ll soon see the audio-native versions of BET, Telemundo, and Shondaland emerge to capitalize on the next wave of the audio spending spree. We also believe that the video-native companies that have already built fandoms with these audiences will soon begin to double down on their audio expansion efforts (but more on that in the conclusion). 

We’ve helped a spanish-language audio company raise two rounds of venture capital at an impressive multiple, and we’re confident they’re not alone. 


Passionate Affinity-Groups

Eight of the top-10 most-watched cable networks have a niche programming focus. Platforms will partner with and acquire creators that cater to passionate communities within distinct category verticals, as a means of enhancing reach and stickiness.

The riches are in the niches. This is nothing new.

  • Fox News built an empire by owning nearly 100% of a minority rather than battling it out for a slice of the majority.
  • Of the top ten most-watched cable networks in 2021, eight of them focus on a niche programming speciality. A few surprising standouts: the Hallmark Channel is the third-most watched cable network, HGTV is the fifth, and INSP TV, which is focused purely on the Western / Cowboy genre, is ranked #7.
  • Discovery Inc, which had a $13 billion market cap before it merged with Warner Media, has centered its entire brand and network portfolio strategy around aggregating niche passion-brands across a broad spectrum of categories (e.g. Food Network, which is the eighth most-watched cable network, Investigation Discovery, which is the ninth most-watched cable network due to its specialized focus on true crime, HGTV and Magnolia, which own the home decor sector, and many many more across niche verticals like travel, animals, sports, cars, and science). And Discovery isn’t alone in this strategy. IAC ($12 billion market cap) and Red Ventures (estimated valuation of $11 billion) have also built empires by cobbling together brands that galvanize small yet passionate fandoms.

 This strategy worked in the legacy “Attention Economy”, and it works even better in the modern “Passion Economy”. 

Once you “own your audience”, the sky’s the limit. Your fans will follow you onto new platforms, new mediums, and over paywalls, and they’ll also patronize your sponsors, go to your events, and buy your products. It’s no wonder that the brands with the most passionate fanbases are the ones with the most diverse revenue portfolios. 

  • Disney makes 40% of its $71 billion in annual revenue through its media networks, 25% through direct-to-consumer and international, 23% through parks, experiences, and products, and only 13% through its studio entertainment.
  • Food52, which was recently valued at $300 million, generates 83% of its $120 million in annual revenue through direct-to-consumer commerce sales.
  • Complex Networks only makes half of its $300+ million in annual revenue through advertising. 15% comes from events, 10% comes from consumer products, and 25% comes from content licensing and other derivative revenue streams like its sneaker marketplace and its B2B intelligence and agency services.

The content buyers that are inflating the prices of IP throughout video and audio are spending so much on content in order to bring audiences to their platforms and keep them there. Over time, as platforms seek to diversify their revenues beyond subscriptions and advertising, they’ll attempt to further extract value from their IP investments through activating new revenue streams like consumer products, events, and gaming (more on that in an upcoming prediction). 

Niche content providers help achieve all three of these goals: acquisition, retention, monetization. Incrementally broadening platform reach. Dramatically deepening platform stickiness and customer lifetime values.

We believe that the most valuable niches to own in 2022 will be consistent with what we saw in 2021: sports, kids & family, and food. But the rollup of passion brands will be expansive, touching every category that commands loyal fandoms.


OTT Video

In the earliest innings of the “Streaming Wars”, there was a prevalent view that as the landscape unfolds, niche platforms would carve out and maintain valuable market share. The Netflixes of the world would be the mass-market destinations, but true superfans would also subscribe to smaller platforms dedicated to their passion of choice. 

Niche platforms started to sprout up everywhere. FilmStruck for cinephiles, Seeso and Comedy Central Now for comedy fans, Drama Fever for fans of Korean entertainment, WWE network for diehard wrestling fans, NickHits for kids & families.

All of those platforms have since been shut down. Of course, there are notable exceptions (like Crunchyroll, which was recently acquired for $1.2 billion), but the prevailing streamer industry trajectory trends towards consolidation. 

As content spending by the major platforms has exploded, it’s tough for niche platforms to compete. Even in their narrow verticals. Why subscribe to a comedy-only platform for $5 per month when for $14 per month I can go to Netflix and get all the comedies I want, plus programming from every other genre?

But although the niche model has proved to be challenged, the core thesis remains: there’s immense value in providing a home for passionate communities on streaming platforms. However, rather than these destinations all being siloed behind different paywalls on different apps, it now seems that there will be a “neighborhood” for each community within the broader ecosystem of the mega-platforms. 

This means that in today’s stage of the “Streaming Wars”, there is immense value — not in being a niche content platform — but in being a niche content producer and seller. The production companies and studios that can super-serve under-served communities will be prime investment targets as streamers spend heavily on acquiring and retaining every niche cohort under their ever-expanding tents. Just look at the kids and family production company, Moonbug Entertainment, which was recently acquired for $3 billion after striking a major output deal with Netflix, which was willing to spend big to retain market share in the kids & family segment against growing competition form Disney+ and Paramount+. 

Additionally, these sticky fan communities will become increasingly valuable to the top streamers in 2022, as they continue to invest in infrastructure to support the development of alternative revenues streams (e.g. commerce, consumer products, gaming, experiential, etc). We wrote about this trend last summer. Netflix has launched shopping hubs (both on Walmart and on its own platform) as well as a gaming studio, Hulu launched a shopping portal, and Disney doubled down on its digital DTC commerce efforts. At all stages of scale — from Food52 to the NFL — passionate communities over-index on revenue diversity. As streamers seek to extract more value from their IP investments, the revenue flywheels enabled by niche sub-communities will make producers that cater to these fandoms even more valuable.

We expect this to continue with investments into film and TV studios that specialize in everything from horror to documentaries, and everything in between (e.g. Zestworld, a new platform for comic creator communities, recently launched by Spotify’s former head of film and TV, Chris Giliberti). Again, we’ve seen that family specializing in sports, kids & family, and food have been the stickiest in terms of generating value at the convergence of content, community, and commerce. We expect this trend to hold in 2022. 



No medium demonstrates the power of niche fan communities more than podcasting. The intimate bond between creator and fan is unmatched by any other medium.

  • Audiences pay 60% more attention to podcasts than they do to social media, 52% more than they do to TV, and 42% more than they do to streaming video.
  • 83% of listeners say their favorite podcast “feels like a friend”…as a result, audio is the most trusted medium by consumers by a considerable margin.

Because of this unique dynamic, audio has the potential to make the stickiness–inherent to affinity groups–even stickier. This makes these audiences especially valuable to platforms looking to secure market share. 

It’s also important to note that the audio landscape is far less saturated in terms of genre “ownership”. We believe that almost every genre that’s popular in video will be popular in audio. The question is, who will own those verticals? No company has claimed the sports space in audio as definitively as ESPN has in video. Who will be the Nickelodeon of audio? The Food Network? Who will make the first tentpole audio-native romcom?

Of course, there’s a world where the video incumbent in each category simply expands its brand equity into audio to claim that category. But there’s still time for upstarts to win this new frontier. While the sleeping giants slowly but surely mobilize their resources towards audio expansion, the digital and audio-native players are already winning over hearts and minds (and ears). Barstool Sports’ podcast network has more listeners than ESPN’s. The Daily Wire’s audio slate gets almost 2 million more monthly listeners than Fox News’. The All Things Comedy podcast network far surpasses the reach of Comedy Central podcasts.

So it’s no wonder that audio-native upstarts have begun raising capital to claim the audio categories that have already proved successful in video.

  • Lemonada Media (women’s interest) has raised $2.5 million (2020 – 2021)
  • Headgum (comedy) has raised $5.5 million (2020 – 2021)
  • Meet Cute (romcom) raised $9.3 million (2020)
  • Blue Wire (sports) has raised $9.9 million (2019 – 2021)

In fact, we’ve advised clients seeking to enter the podcast market with companies focused on owning high-value lanes like kids & family, sports, comedy, news, and more. 

Like in video, revenue diversity is becoming increasingly important for audio platforms. Spotify just partnered with Stripe to power creator subscriptions. Apple already rolled out infrastructure to support podcast subscriptions. Spotify also partnered with Shopify to support creator monetization through commerce. Amazon already rolled out commerce integrations for its audio platforms. The content creators to generate the most revenue through these new features will be the ones that engage the stickiest fan communities. So not only will niche creators help increase acquisition and retention, but they’ll also deepen and diversify listener monetization. 

Although there have been some recent headwinds in overall audio investments, we’ve seen that the companies that can successfully attract capital are those that can successfully build scalable communities that enable diversified revenue models. In 2022, we expect investment capital to flow towards highly specialized audio content producers in order to capitalize on the next wave of big ticket acquisitions. Furthermore, as these companies establish sticky fandoms in their target verticals, we predict they’ll expand not into new verticals, but into new mediums. Enhancing their value by doubling down on their core fans, and expanding their core verticals, rather than doubling down on their core medium. These niche players will seek to super-serving their go-to audience segment by producing specialized content for film, TV, digital, and experiential rather than broadening the scope of their podcast slate into new verticals (which is how the first wave of audio M&A targets scaled). 

As the “Streaming Wars” merge with the “Audio Wars” to form the “IP Wars”, the lines will continue to blur. The ability to develop and produce beloved IP that connects with dedicated audiences will be the most valuable specialty. The medium through which those stories are told will no longer be a specialty — but a starting point, from which these companies will evolve. This process will go both ways. Just as specialized audio producers will expand into video, video-native production companies that resonate with a certain fanbase will soon expand into audio.


Conclusion: Specialized Content Creators Will be Medium-Agnostic

Specialized content creators will maximize the value of their communities by diversifying their audience touchpoints across mediums. Film and TV studios will expand into audio, and vice versa.   

The worlds of audio and video are converging. All the major streaming services have launched major podcast initiatives and are adopting podcasts into film and TV shows. Spotify, Wondery, and other owners of audio-native IP have signed major output deals to adapt their podcasts into film and TV.

Video and audio platforms, which are driving the IP spending sprees, are both pursuing the same mandate: acquire IP as a means of acquiring and retaining new customers. In this ecosystem, the most valuable capability is the ability to create content that resonates deeply with its target audience. The boundaries dividing audio and video are becoming more and more irrelevant. If you can create content that connects deeply with a particular community (BIPOC, LatinX, Gen-Z, Women, sports fans, foodies, sneakerheads, etc.), you’re in high demand by the platforms vying to win new eyeballs or new ears. 

Therefore, in 2022 we expect that specialized studios and production companies will seek to maximize their value by expanding their output to cover both mediums. Specialized audio startups like Blue Wire will develop IP and video programming for sports fans, to be licensed to Netflix, ESPN+, DAZN, and all the other platforms competing for the eyes, ears, and wallets of the billions of sports fans worldwide. Specialized video producers like Moonbug will begin developing podcasts to entertain and educate kids when they’re away from screens, just like they do when they’re in front of them. 

The most valuable IP creators in 2022 will be the ones who can delight one audience across two mediums. There are “wars” going on two fronts. The combatants of both the “Streaming Wars” and the “Audio Wars” need the same audiences to win. The most powerful bullet-makers will be those who can leverage their singular expertise to supply the front-lines with the ammunition to win the fandoms they so desperately need.

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