The $115Bn opportunity for content & IP-led studios

3 ways studios are innovating to create IP-led opportunities (& why investors and networks alike are investing billions)

3 ways studios are innovating to create IP-led opportunities (& why investors love it)

Welcome back to Meagan’s Newsletter: The Gen Z POV, where I break down trends, industries, and tech with a Gen Z lens every other week. I’m Meagan and I’m so happy you’re here.

Given I write about TikTok nearly every week, it’s clear I like thinking (and writing) about the intersection of content and culture. But something I haven’t commented on yet is the content “gorilla” in the room… Hollywood. And how content studios are poised to attract real $$$ in the form of investment and also the mindshare (and wallets) of Gen Z.

Before I left my job as a VC late last year, I had many conversations with other investors about where they were deploying their money. Of course there were many discussions about “the future of AI”... but also finding ways to invest in things that seem less tech-y and way more about brands and tangible things that would accrue value overtime.

This is just a sampling, but I think it plays into a larger trend around the value that exists beyond the tech ecosystem & how culture can really drive it. The richest person in the world today is not Elon Musk or Bill Gates… it’s Bernard Arnault, the CEO/Founder of LVMH.

I think there’s a massive opportunity to build new brands with content (and IP) at the center for the next generation… and studios are capturing this opportunity in a big way. Below I’ll walk through 3 overarching trends:

  1. The premium content flywheel: iconic shows → cultural resets → new brand creation (think A24 / Euphoria & creation of Half Magic Beauty)

  2. Creators as studios and the brands they launch (think / Ryan’s World and creators like Mr. Beast or Ms. Rachel)

  3. The power of community-led sourcing & film development (think Hello Sunshine & Reese’s Book Club)

Plus some thoughts on Shondaland and how I view the future of this space. Now… let’s get into it! ⬇️

First, let’s outline the opportunity here when it comes to content & IP-led studios.

Market size & growth

Global content spending for Netflix was $16.84Bn in 2022

U.S. streaming services are expected to spend upwards of $115Bn on programming this year… every network from Netflix to AppleTV is investing in original and exclusive content.

And this makes sense, just look at Netflix’s 4 biggest hits / most watched shows:

  • Squid Game (season 1), a Korean survival thriller -- 1.65 billion hours

  • Stranger Things (season 4), a retro sci-fi series -- 1.35 billion hours.

  • Wednesday, a coming-of-age supernatural dark comedy -- 1.24 billion hours

  • Dahmer, a true-crime serial killer series -- 856.2 million hours.

What do these shows have in common? All content made exclusively for Netflix. And now that there is more competition from other streaming services (Peacock, Hulu, Disney+, HBO Max, etc.), original content is the biggest differentiator and draw for new subscribers.

Clear exit optionality for studios

Blackstone-owned Candle Media has spent billions to acquire top content studios

Valuations of content have increased significantly over the past year, 2-3x what industry experts and investors anticipated (a huge contrast vs. what we’ve seen in tech/software). Just a few examples as of late:

  • This month, private equity firm Apollo bought a $760mn stake in Legendary, the Chinese-owned movie studio behind Dune and Godzilla

  • Blackstone has committed more than $2bn to building a new production company called Candle led by former Disney executives, and Candle has been on quite the M&A spree:

    • Aug 2021: Acquired Reese Witherspoon’s production company Hello Sunshine for $900m, valuing it at 7x revenue

    • Nov 2021: Acquired Moonbug Entertainment, the studio behind the hit children’s show Cocomelon, for $3bn

    • Jan 2022: Acquired a $60mn minority stake (10%) in Westbrook, Will Smith’s studio

  • This month, ‘Chef’s Table’ producer Boardwalk Pictures sold a minority stake to Shamrock Capital in a 9-figure deal

All that said, between 1999 and 2018 just 3.4% of independent films in the U.S. made a profit. Investors today have an innate focus on premium content/IP, and below I’ll walk through 3 ways these studios are innovating to create real differentiation and upside for their content and IP… all with a next-gen lens :)

1. The premium content flywheel: iconic shows → cultural resets → new brand creation

Breaking through the cultural zeitgeist to launch a brand: A24 & Half Magic Beauty

If you haven’t seen Euphoria and are interested in Gen Z, I would highly recommend watching it. It’s a show that truly broke through the cultural sphere, with nearly everything becoming a trend on TikTok and IRL.

The finale (and plenty of other episodes) trended on Twitter, as everyone tuned into “Euphoria Sunday” when they aired — with 30 million tweets since its Season 2 premiere, Euphoria is the most tweeted about show of the decade. Scenes from the show would be featured at raves with everyone holding out their phones to record the moment and scream the words back. And scenes from the show (or songs) and fan edits would constantly be all over your FYP.

Truth be told, it was hard to escape Euphoria because it was everywhere (any show’s dream)... and so I caved and watched it. And loved it. And then I hosted a Euphoria-themed birthday party for my 25th birthday where everyone dressed up like characters from the show. Even Euphoria-themed parties were trending last year when the show aired (see here & here), so it wasn’t just me.

See what I mean? Euphoria captured the cultural zeitgeist. And A24 (the studio behind it) raked in the cash & capitalized on the opportunity by creating a Gen Z brand that aligned with the show.

Enter Half Magic Beauty: “magnifying Gen Z’s obsession with effervescent, maximalist makeup” and brought to life as a collaboration between A24 Films & Euphoria’s lead makeup artist Donni Davy. The brand launched less than a year ago and already has 122k followers on Instagram.

And it’s so authentically Euphoria because it helped create & popularize these looks for our generation. The bright-colored eyeliner & tools you can use to create the perfect winged “Maddy” look. The gemstones you can easily apply around your eyes. Content that helps creators replicate the looks from the show with glitter & shimmer galore.

The next season of Euphoria isn’t supposed to debut until 2024, so that means fans have to wait nearly 2 years to see Zendaya grace our screens again as Rue. But in the meantime, Half Magic Beauty is continuing to keep fans engaged, spending money, and the show top of mind.

It was a genius move on behalf of A24 to launch & incubate this brand, and I expect to see other studios adopt a similar model as they create cultural moments via their shows / IP / characters.

2. Creators as studios (and the brands they launch)

New worlds for Gen Alpha: CoComelon, Ms. Rachel, and Ryan’s World

A few weeks ago, I wrote about the rise of, Gen Alpha on socials & the creation of billion-dollar kids franchises like Ryan’s World. is a kid-focused content studio (it is venture-backed!) identifying rising kid stars on YouTube and turning their content into businesses, with Ryan’s World being the prime example.

  • Ryan Kaji (the 9 year old star of Ryan’s World & one of the biggest YouTubers in the world) is estimated to have earned $29.5 million from his YouTube channel in 2020. In that same year, it’s estimated he earned $200 million (almost 7x) from Ryan’s World branded toys, clothing, and TV deals.

And kids content is proving to be a ripe area for brand-building. I mentioned CoComelon (created by Moonbug Entertainment) above because of their $3Bn acquisition, and as the world's most-watched kids' programming show, they rake in an estimated annual ad revenue of ~$120 million.

I predict that the next “CoComelon” type of exit will actually come from a creator who turns themself into a studio/world similar to what has done with Ryan — Mr. Beast was recently offered $1Bn in an acquisition offer that included all of his social channels and associated companies (Beast Burgers, Feastables) which he turned down.

A creator I think is crushing it right now in this arena is “Ms. Rachel” who creates highly researched toddler learning videos that encourage speech and development — parents & babies/toddlers alike LOVE her.

“MsRachelForLittles” channels have 601k followers on IG, 2.5M followers on TikTok and over 2M subscribers on YouTube… but again, she’s been able to move into the cultural zeitgeist largely because of TikTok.

I certainly don’t have children (can barely take care of myself!), but Ms. Rachel content still comes across my FYP all the time — she collabs with popular TikTokers like Elyse Meyers, and her sounds often become popular trends where popular family accounts will chime in and create their own spin on it. Just like this one, where several parents show their kid’s (very happy) reaction to hearing Ms. Rachel’s voice!


#duet with @hal_eigh_ #fyp so so so cute! #msrachel #babiesoftiktok #toddlermom

In the TikTok comments section, parents are begging for Ms. Rachel merch and toys, with one mom even creating her own custom Ms. Rachel doll for her daughter and documenting the process.

This is just the beginning for Ms. Rachel’s content (and business empire)… I envision live shows (my first ever concert was a live Barney experience at the ripe age of 2), toys, merch, and even educational games.

Plenty of companies are popping up to invest in creators directly and have a revenue share agreement of their future income — Slow Ventures’ Creator Fund invests anywhere from $100K to $5M in each person in return for anywhere from 1-5% of the creator’s future earnings over their careers, and startups like Creative Juice & Goldenset Collective have a similar model where they invest upfront for a % of future revenue streams.

This seems to be a more popular model for early stage investors, and I’m excited to see how the space evolves and startups help creators build powerful brands that capitalize on their content empires.

3. The power of community-led sourcing & film development

How Reese Witherspoon leverages her book club to validate shows for Hello Sunshine

The idea of launching a book club is not new… we saw Oprah popularize the model as a celebrity curator with “Oprah’s Book Club.” She would pick a book for her book club, share it on her show, and those books would regularly sell over 1 million copies.

What’s different with Reese’s Book Club (led by Reese Witherspoon) is that it not only helps boost the sales of the books she curates, but serves as lead-gen and a community-powered engine for the films Reese produces with Hello Sunshine. Before she even pitches a script or new project, she’s already validated the idea with the book club’s over 2.5M followers on IG and broader community, with a focus on women-led content.

Take Where the Crawdad Sings as an example.

The book’s first print run (and debut novel from 70-year-old author Delia Owens) was 27,500 copies, a fate which changed when the book was spotlighted a month later as a part of Reese’s Book Club. To date, the book has sold over 12 million copies.

And in 2022, the book was turned into a movie, produced by Reese Witherspoon and Hello Sunshine, grossing $140M at the box office on a $24M budget. No big actors or star talent to draw in crowds as you see with a number of “big box office” films today… just a great story and powerful community-driven production.

This is just one example from Reese Witherspoon & Hello Sunshine’s success that led them to a $900M acquisition. They’ve rinsed and repeated this model with other Reese’s Book Club picks-turned-movies or shows. As of June 2022, of the 54 book club picks to date, more than 30 have gone on to make The New York Times best-seller list & several others have been produced into hit movies/series like Little Fires Everywhere and Big Little Lies.

I think this is just the beginning for Hello Sunshine & the company that acquired it (Candle) <2 years ago.

In conclusion…

Keep an eye on the mastery that is Shonda Rhimes & Shondaland… she doesn’t miss!

The studio I’m watching most closely today? Shondaland by Shonda Rhimes, responsible for new hit shows like Netflix’s Bridgerton and Inventing Anna as well as classics like Grey’s Anatomy, How To Get Away With Murder, and Scandal. In 2017 she signed a $100M deal with Netflix, but that has supposedly grown into a $300M-400M deal (and 5 year extension) after the success of Bridgerton for the streaming service.

I’m a Bridgerton super-fan. I’ve read all 38 period novels by the series’ author Julia Quinn, including the Bridgerton series & prequels (2-3x over). I’ve seen Season 1 & 2 of the show upwards of 8x. And I’m having a Bridgerton-themed birthday party this year. So perhaps I’m a bit biased.

But again, Shonda Rhimes is creating Bridgerton worlds… not just content.

  • After Season 2, Shondaland (in collaboration with Netflix & events-company Fever) launched “The Queen’s Ball: A Bridgerton Experience” in 9 U.S. cities. It’s exactly what you might think… a Bridgerton-themed ball where people show up in full Regency-era costumes in the hopes of being crowned the “diamond of the season.” I’m so sad they didn’t come to NYC… but a girl can dream they’ll do something big for Season 3’s release in a similar vein.

  • The show’s release inspired the fan-led creation of “The Unofficial Bridgerton Musical” on TikTok by Emily Bear and Abigail Barlow… garnering millions of views on their respective channels and leading to a Grammy win for the pair. Again, breaking into the cultural zeitgeist with fan-led creations and content (although this did lead to a lawsuit for Barlow & Bear)!

  • She’s launched spin-offs of the original books, taking the Bridgerton IP to new heights with “Queen Charlotte: A Bridgerton Story” which is set to premiere on Netflix in May. I am naturally ecstatic about this, as this is entirely new content which even the most dedicated fans haven’t read yet!

I wouldn’t be surprised to see Shondaland begin to launch brands alongside their content & experiences overtime, as Rhimes is constantly innovating and there’s a ton of whitespace for her to go after. It feels like every show she makes is a smashing success.

In the period drama world alone, Bridgerton just scratches the surface — BBC has made a killing on the genre creating many series. There are plenty of book-to-film adaptions I’d love to see… The Ravenels, The Wallflowers, and The Hathaways series by Lisa Kleypas to name a few!

Needless to say, this is how I envision the future of content — taking IP to new heights through the creation of brands and experiences, and doing it in a community-led way.

Thanks again for reading!

And as promised, here are a few things (tech, culture & life) I’m intrigued by at the moment.

  • Tech: When it comes to creating content, so important to have a mix of personal & professional — and this is why! This week I had a Gen Z speaking engagement in Switzerland and got to travel a bit, so I posted some of my snowy pictures on Twitter. They caught the eye of a new travel startup called Safara which commented on my post, and they help travelers get 10% back on every booking & carbon offset your stay. I love new tech that makes it easy for consumers to be climate conscious, so this was a great find this week! ❤️ 

  • Culture: The Selena Gomez x Hailey Bieber drama… it’s allllllll over TikTok this week and people are proceeding to cancel Hailey (again on cancel culture, it truly is every week)! If you’re not familiar, this TikTok breaks it down. But there are literally thousands more.

  • Life: Still living for the Lizzy McAlpine Ceilings edits, from the dramatic running ones to the singing edits. TikTok really says “For You” doesn’t it! Lizzy’s “Apple Pie” was my top song on my Spotify Wrapped last year and I got to see her twice in concert — opening for Dodie last Feb & then at a sold out show at Webster Hall in September… luckily before she blew up on TikTok recently. Ceilings was and still is my favorite song on her new album (seems everyone agrees!) and I recorded the whole thing at her last concert. Girlies don’t gatekeep, so I decided to share it with the world. Plz enjoy ❤️