Media mergers and acquisitions (M&As) are no new phenomenon, but over the last couple of years, we have been witnesses to an increasing number of media companies consolidating to expand their offerings. While some critics may doubt whether together is always better, these industry megadeals, in fact, hold huge promise for consumer-driven content and the tech that powers its creation.
Undeniably, part of the reason behind this recent drive in media consolidation is the rapidly-evolving nature of the media landscape. Let’s take a look into how it’s changed in a way that none of us could have foreseen 20 years ago, and how this helped to drive the media M&As we’re now witness to.
An evolving landscape
We’ve gone from having to choose between the standard array of cable providers to now being presented with not only this choice, but also which streaming platform(s) should have our allegiance too.
Most households (especially those containing Gen Zs and Millennials) now expect to have access to an extensive catalog of quality content that they can watch whenever they want. While cable TV still has a stronghold in most homes, gone are the days where we would have to plan our evening schedule around the shows that were gracing our screens. In fact, a 2018 report found that 70% of US broadband households subscribe to at least one over the top (OTT) service.
As more on-demand streaming platforms arise from cable channels (such as HBO Now and NBC, which will launch its own streaming service, NBCU, next year), competition is fierce - and increasingly traditional media companies want a larger slice of the pie.
With many of these OTT platforms costing upwards of $20 per month, few people are going to subscribe to more than one or two at a time, making competition even fiercer. So, it’s no surprise that media companies have realized that they need to jump on the OTT bandwagon if they are to stay afloat.
Over the past year we have seen Disney acquire Fox for $71 billion, AT&T merge with Time Warner in a deal worth $81 billion, and a merger between Viacom and CBS that was arguably necessary for each entity to survive in such a competitive landscape.
But what does this mean for content?
More competition means quality content and OTT originals
This increase in OTT platforms (with some of the biggest players including Netflix, Amazon Prime, Hulu, HBO Now, Starz and MLB.TV) means that increasingly, media companies are reclaiming shows that they had previously sold the rights to to streaming services. For example, Netflix will no longer be able to stream The Office, as NBC is reacquiring the show for its own OTT platform.
We are also witnessing a rise in original content from OTT services - a trend that was undoubtedly proven by the success of Netflix Originals. Other platforms are following suit and reaping the rewards. For example, Amazon Prime Originals boasts a number of successful shows which collectively received 47 Emmy nominations this year, and we should expect to see other emerging OTT players creating their own originals too.
In fact, with the advent of this new era of merged companies, we may even see new markets open up for independent content creators. As they become bigger entities with more resources, many of these companies will be seeking out new content to capture a broader audience.
New tech will be necessary to stay ahead
It’s not just mutual content sharing that the respective parties of media mergers are benefitting from. Media organizations that are now dipping their toes into the OTT pool are also fueling up on the most important resource of the 21st century: data.
While cable companies have always been able to track how many views a certain show had, and where the viewer is located, the insights would pretty much stop there. Now, OTT platforms gather much more intricate data on not just what people are watching, but how they are watching it. For example, OTT can get much more granular data on when or why people switch off at certain points by looking at the points at which users abandon a series. These platforms can also better understand consumption trends across households as different viewers use different “profiles” to watch content.
These insights allow streaming platforms to curate data-powered content strategies that they know will resonate with viewers. And now by teaming up with bigger, traditional media giants, they can share that data.
For example, Netflix has invested billions in contracting content creators like Ryan Murphy and Shonda Rhimes, an investment which has yielded Emmy-nominated content. Most recently, the platform’s Original “When They See Us” earned 16 Emmy nominations - the most ever for a limited series.
The AI-powered recommendation algorithms trained and used by streaming platforms also form a key part of the service, and are essential for any player hoping to compete in the OTT game. In fact, these personalized algorithms don’t only inform decisions on future content, but they also act as a “marketing tactic for targeting new, returning and loyal viewers to maximize subscriber yield,” according to Multichannel News.
As well as leveraging AI, we can also expect these expanding media powerhouses to integrate technologies such as VR into their offerings. Currently, Chinese entertainment companies like iQiyi are the first to offer VR headsets as part of their service subscription. While this will of course require a catalog of VR-friendly content, it enables media companies to engage with their audiences in a unique way. VR integration represents an innovative step that many media players will take to stay ahead of the technological curve.
As these mergers and acquisitions change the face of the media landscape, remaining at the forefront of technology development is essential for those fighting to lead the way in the industry. With the help of innovative technology solutions from organizations that aim to be the partner of these newly emerging entities, not just another vendor, they can ensure they maximize their customer reach and stay ahead of the curve.