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Consolidation and retention How D2C is now driving video M&A strategy

Tim Mulligan
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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