NEW YORK, NY – Several years of mergers and acquisitions between big names in the media industry were finally punctuated by Viacom and CBS merging into ViacomCBS.
After this, many market analysts expect that such transactions are to take a break in 2020, primarily due to the financial fatigue caused by back-to-back mergers and acquisitions by players such as AT&T, Disney, and Comcast.
At the close of the decade, it would seem that all relevant entertainment studios have chosen which corporation to partner with, and as such there remains no more need for further M&As.
Cord cutting is considered the chief driving force for these M&As. The demands of the new generation of entertainment consumers, who are most comfortable with streamlined consumption models, such as those offered by Netflix, motivated companies to merge and consolidate assets in preparation to enter the streaming market.
Adding to the pressure, the arrival of tech giants such as Apple, Google, and Amazon to the market.
These companies, as opposed to the proponents of legacy media, use content as more of a marketing tactic rather than a revenue source. They have tied their content offerings to their primary goods and services, effectively creating a viewership virtually instantaneously.
This, according to market analysts, lends a potent resiliency to tech giants’ foray into the streaming market, as content is merely part of their business efforts. This means that the rest of their business can carry an underperforming content department until it achieves self-sustenance.
What’s more, say analysts, is that tech moguls are versed in collecting analytics in order to improve their output; something which, by and large, traditional media does not do.
However, this doesn’t mean that smaller-scale mergers and acquisitions will not take place in 2020, despite the general dormancy of mega media M&A’s in the same year.
After 2020, though, many agree that M&A’s will start up again with renewed vigor, driven by the mounting pressure put by the efficacy of tech media moguls such as Amazon and AT&T.