Media M&A Activity Shows the Importance of Good Content and Strong Data Management
BLOGJun 29, 2021
We’ve all tracked the consolidation happening in the media and entertainment sector, a trend driven by executives’ efforts to build and maintain subscription numbers.
A quick look at recent activity: Amazon bought rights to over 20,000 films, television series, and other content from MGM and its Epix network. (Netflix has 15,000 titles, as a point of reference.) Warner Bros. Discovery brings complementary content together from HBO Max’s leading dramas and Discovery Channel’s documentaries. Disney’s purchase of 21st Century Fox in 2019 achieved the same purpose. Comcast brought American and European programming together with its purchase of Sky. And Univision’s Televisa acquisition built a Spanish-language media leader.
This M&A activity makes one thing very clear: the more quality content a streamer can offer, whether its original content or not, the greater an advantage it has against the competition. There are three routes that media and entertainment executives can take to grow those content offerings.
The first is to create original programming. It’s a system that works, as we’ve seen from the awards won by the likes of Minari and House of Cards. Powerful analytics capabilities help facilitate these successes, pointing executives toward the genres and actors that viewers like the most while also enabling them to keep tabs on revenue potential. Unfortunately, original content creation is also an incredibly expensive approach and one that, most of the time, doesn’t result in blockbuster wins.
The second option is content licensing. By signing distribution deals, providers can engage subscribers with a specified content mix for a specified period of time.
The third is the approach that we’ve seen more recently: buying content that data has shown will appeal to viewers. It’s more cost-effective and much faster than creating original shows, and a longer-term play than content licensing.
If you’re like me, you might be asking how, regardless of whether they’re streaming original content or not, these companies – many of whom didn’t originate to focus on streaming – are going to retain and grow subscription numbers. The answer, as I analyzed in my recent piece for TV Technology, lies in their data.