North America Interactive Media & Entertainment: Beware — Open Platforms Rapidly Taking Share From Traditional Media

In a new report from Citi Research, Jason Bazinet considers the rise of “open” content models, which are increasingly more popular with consumers than traditional “closed” models. Firms that opt for open models are seeing faster growth rates and are being rewarded by the financial markets, suggesting the companies with closed models might consider taking a page from their open rivals.

The “creator economy” has been around for nearly two decades; to us, what separates it from traditional media firms is the answer to a simple question: Is there a gatekeeper? Gatekeepers determine what movies are made, what video games are developed, what TV shows are produced, and what stories make it to print. A business with a gatekeeper is closed; one without a gatekeeper is open.

What interests us is that across media, open models are growing far more quickly than closed ones. Take social media, the original open platform. In 2014, social media captured just 2% of global ad spend, but by 2024 that had grown to 22%. Social media is now the second-largest source of digital advertising, behind search. But the strength of open platforms becomes far more interesting when we dig into traditional media.

Consider publishing. Substack is a private firm that launched in 2017; an open platform, it provides publishing, payment and analytics to independent writers. It doesn’t disclose financials, but in March it enabled 5 million subscriptions. Its digital subscription base is a third as large as that of the New York Times and nearly as large as that of News Corp. unit Dow Jones . And it’s growing far more quickly than traditional closed rivals: Substack’s 2020–2025 compound annual growth rate (CAGR) is 82%, compared with 10% for the New York Times and Dow Jones.

We see a similar pattern with the video subsector. In 2021, Netflix had a larger share of U.S. viewing than YouTube. But YouTube then overtook Netflix, and in 2024 and 2025 YouTube increased its share to 12% from 8% in less than 18 months, even as Netflix’s content spending rose to $18 billion from $13 billion. We see this as another powerful sign of consumers’ preference for open models over closed ones.

We see a similar pattern unfolding within video games. Roblox, founded in 2006, is a platform that allows game developers to create, host and monetize experiences within its platform. Roblox is growing far more quickly than its closed rivals: Its 2018–2025 CAGR for revenue is 47%, compared with 13% for Take-Two, 10% for Playtika and 5% for Electronic Arts.

In considering stock performance and open/closed models, we ranked relevant media stocks from fully open (10) to fully closed (1). Most names are at one extreme or the other, though there are a handful in the middle. When we compare our open/closed score to stock returns over the last 12 months, the data suggest improving a firm’s open score by one point is akin to a 21% improvement in per annum stock performance. Given this dynamic, we think companies may begin to think about the strategic implications of exposure to open content and business models. 

The bottom line is that seemingly everywhere, consumers are increasingly embracing content from open platforms without a gatekeeper, and the financial markets are rewarding the faster growing firms that adopt these platforms. For firms that retain closed models, this increasing preference for open content may pose a long-term risk.