Consolidation and retention How D2C is now driving video M&A strategy
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The 20,000 foot view: The big bang moment of opened up a new offensive front for media majors as they competed with the communications and tech majors for streaming audience market share, which was previously lost to the SVOD insurgents. Pureplay media players responded via defensive consolidation and / or selling themselves to more motivated competitors. With peak stream approaching, the key players are now looking to consolidate subscriber acquisition by deepening and broadening their content portfolios. Video streaming being mainstream, alongside the return of inflation, is forcing a shakeout of underfunded and library-lite propositions. This will lead to market consolidation among the non-core players over the next two years.
Key Insights
- Video M&A the previous decade was defined time-specific responses to external market and were thus reactionary rather proactive
- TV network majors saw Netflix as a of found revenue, transforming Netflix the Spotify of the TV – a too-big-to-fail streaming frenemy
- The result previous stalwarts of the TV was to sell assets that competed with Netflix (film studios, non-news and sports TV networks)
- New competitors focus on the areas where is not competing – news sports 2019 was the inflection point where streaming went mainstream, with of consumers having video subscriptions (MIDiA 2019 consumer survey, US, UK, Canada, Australia, sample size of
- While Covid were the tipping point, the was the big bang moment
- The biggest behind the big bang moment relentless competitive pressure being placed TV networks and operators by insurgents
- M&A video is fundamentally driven by competitive
- M&A success be driven by the successful delivery of Genres, Originals, Library, Formats
**Note - MIDiA defines majors as the following:
Media majors: majority of revenues derived from media monetisation
Communications majors: majority of revenues derived from communication monetisation
Tech majors: majority of revenues derived from tech monetisation
Companies and brands mentioned in this report: Apple, Apple TV, Amazon, Amazon Prime Video, AT&T, Comcast, Disney, Disney+, HBO Max, MGM, Netflix, Peacock, ViacomCBS