Taking Center Stage: Mergers and Acquisitions in Broadcasting

Mergers and acquisitions (M&As) have long been a powerful strategic tool in a wide range of industries. The act of merging two distinct companies together, or one company acquiring another, is often the result of forward-thinking perspectives and the desire to grow and expand into different sub-industries, markets and niches.

In the broadcasting and media industries, M&As are all too prevalent. Whether it be behind the scenes with the media technology manufacturers, or the front-of-house TV networks and distribution conglomerates. M&As are seen as a fairly common process to advance technologies and fuel sustainable competitive advantages through pure innovation and growth.

But more recently, things have been heating up on the M&A scene within the broadcasting and media industries. With COVID-19 influencing a clear rise in linear OTT and on-demand content consumption, media companies and distributor platforms have been scrambling to provide the best online content at the best possible price. Likewise, a rise in satellite TV consumption (Linear TV is not dead) has renewed faiths in the medium and opened the doors to a multitude of new media opportunities. But it’s not all sunshine and rainbows – competition authorities will have their say, and recent legislation proposed by the Polish government threatens to exclude all non-EU companies from having a majority stake in their media. If this sentiment were to be echoed across the world, it could drastically change the M&A landscape in broadcasting as we know it.

In this blog, we’ll be taking a look at some recent examples of M&As within our industry; the pros, the cons, and the wider impact on the broadcasting landscape.

MERGERS & ACQUISITIONS IN BROADCASTING

The recent merger of Warner Media and Discovery has topped the headlines. And for good reason, too – the move will create the second biggest media business in the world, behind only Disney. The resulting media catalogue, which will combine thousands of Warner Brother movies, acclaimed HBO series and Discovery documentaries, will likely become the largest and deepest content catalogue ever offered to consumers.

The move is likely to present some real competition to the likes of Netflix and Disney+, who have been bolstering their original content libraries respectively in direct relation to deals like Warner Bros. Discovery. Instead of licensing their beloved content to third-party OTT platforms, more and more media companies are opting to keep their IP in-house and reap the benefits of bringing it directly to consumers. Whilst licensed content was once the key to Netflix’s incredible subscriber growth, it now holds the potential to further saturate the streaming market and take away its all important market share.

The recent acquisition of MGM by Amazon is about as unexpected as it gets. Amazon is most well known for its next-day delivery of common household goods (and pretty much everything else). Metro-Goldwyn-Mayer (MGM) is one of the worlds most recognised entertainment companies and film studios. About 10 years ago, such an acquisition would have sounded unrealistic and, well, confusing. But as Amazon Prime Video rockets in popularity and the service looks to expand its content library, it’s telling of Amazon’s future strategy when it comes to streaming content. Fence off high-quality, exclusive content, and watch the subscriber growth (and retention).

Amazon picked up MGM for an eye-watering $8.5bn – a sure sign that the company is serious about its streaming division and its developing competition with the likes of Netflix, Disney+ and the rest of the ever-expanding streaming platform landscape. Research from PlayBox Technology in July of 2021 found that 26% of households surveyed subscribed to one streaming platform, with 34% of households choosing to subscribe to two platforms. With a growing number of households looking to streamline their amount of streaming subscriptions and save money, it will ultimately come down to which platform can offer the best content for the best price.

On the sports media scene, UK telecom provider BT is currently undergoing talks with a flurry of potential buyers for its sports broadcasting division – appropriately named BT Sport. Since BT Sport’s launch in 2013, the platform has hoarded an impressive collection of sports rights, including the Premier League, Champions League, UFC and MotoGP. However, as more and more competition enters the sports broadcasting market, the prices of sports rights continue to rise. Ultimately, this resulted in the long-term strategy of BT Sport becoming unclear and no longer feasible for the telecoms company. 

For the right buyer, gaining access to BT Sport’s impressive sports rights portfolio should be a no-brainer. DAZN, also known as ‘the Netflix of sport’, is one such speculated buyer. The move would see them dominate the Boxing landscape in the UK with the addition of Queensberry Promotions. Additionally, the inclusion of UFC would form an unstoppable combat sports portfolio. Further, the Premier League will remain an incredibly attractive draw for millions of viewers across the world. Many others, like Disney and Amazon Prime Video, are also hinted at being in the running to acquire BT Sport. One thing is for sure – the resulting buyer will solidify their place in the sports broadcasting market for many years to come.

CONCLUSION

Behind the scenes, M&As within the broadcasting and media industries are almost a daily occurrence. Much of the technology that powers the media solutions of today are the result of fantastic innovation harnessed by smaller and independent companies. M&As help to bring such innovations to the mainstream, ultimately benefiting the end consumers. Meanwhile, huge M&As (like the ones mentioned above) are extremely high-profile and take up much of the popular news coverage. Astronomical sums of money are exchanged as new media and content partnerships are formed. Again, it’s all for the eventual benefit of the consumer. And to make as much money as possible for the companies involved, of course.

To remain competitive in the developing streaming market, companies require a solid content catalogue, a direct relationship with their audience and the desire to expand into untested territories. For some, like Amazon, the best way of achieving this level of competitive advantage is through M&As. Other companies are likely to follow suit as the streaming wars continue to heat up.

At PlayBox Technology, we work with a number of sports broadcasters and OTT sports platforms. Our solutions are designed to ensure that broadcasters in high-pressure situations can deliver their content to audiences effectively, professionally and on time. Our products have been rigorously tried and tested over 15 years, resulting in PlayBox Technology becoming the #1 trusted Channel in a Box and playout solution provider. For more information about our industry-defining streaming and playout solutions, get in touch.

Check out Episode 34 of the In the Hub podcast to learn more about mergers and acquisitions in broadcasting: https://hub.playboxtechnology.com/1296689/8477688-ep-34-mergers-acquisitions-and-broadcast-technology-w-shengli-han