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How Mergers are Changing the TV Landscape

How Mergers are Changing the TV Landscape

With Disney’s enormous acquisition of the bulk of Fox’ assets still fresh in mind, the launch of streaming service Disney+ is poised to further fuel the changing television landscape. Among this recent slew of streaming launches, mergers, and acquisitions, advertisers need to understand how these headlines will affect the Television media industry moving forward.

There is no question that the latest mergers — and now AT&T’s sale of its Hulu stake back to the streaming platform — have changed the landscape of both traditional TV and streaming. But how?

MediaRadar took on the task of answering this daunting question and came up with a distilled answer for you.

The Shape of TV Mergers and Acquisitions: It’s AT&T, Comcast & Disney vs. the Tech Giants

In the past year we’ve seen AT&T Comcast and Disney collectively spend $215 billion on acquisitions. For a brief recap:

  • AT&T purchased Time Warner for $104 billion
  • Disney purchased most of 21st Century Fox for $71 billion
  • Comcast purchased European broadcaster Sky for $40 billion

The rash of purchases come as three of the largest media companies position themselves to compete directly with three of the largest tech-turned-media companies: Netflix, Amazon and Apple. Each have plans to launch their own streaming platform, and everyone but Disney has some catching up to do with the content they provide.

“All six companies embarked on a series of massive investments that will reshape the landscape of media: who makes entertainment and how people consume it,” according to an article in The Economist.

The acquisitions of this past year may not have all had the same substance, but they do have a shared end goal: to reshape both traditional and streaming television, and to come out ahead with the biggest piece of the pie.

M&A Implications for National TV

It’s tempting to focus solely on the streaming wars and the dramatic headlines that come with it. But the M&A activity of the past year has also dramatically transformed the national traditional TV landscape.

For a visual representation of the change, see the chart below signifying the breakdown of total ad revenue in 2018 and the estimated market share for the current year.

For an even more detailed breakdown, consider the following insights from an analysis of MediaRadar data:

  • Disney, with its acquisition of various networks bought from Fox, should become the #1 company in terms of national ad TV dollars captured.
  • If advertiser behavior remains consistent, Disney & NBCUniversal will take in over 4 of every 10 dollars spent on national TV advertising.
  • Between AT&T buying TimeWarner and Disney buying major networks like FX and Nat Geo, approximately 13 percent of the market has switched hands over the past year.

Could the landscape change again in 2019? And then again in 2020? With rumors flying about an upcoming Viacom and CBS merger, it is possible — and some would say likely.

If the merger between Viacom and CBS goes through, the newly formed network would become the third largest player in the market, alongside Disney and Comcast NBCUniversal. And it would push the newly formed Fox Corp, which is still holding its own despite selling most of its assets to Disney, right to the bottom.

However, we can’t completely extricate the discussion of national TV from the consideration of streaming TV. Each of the major national players are adding their own streaming services to directly compete with Netflix and Amazon (and now, potentially, Apple). “There’s been a drastic change among legacy media company executives the last two years,” writes Alex Sherman at CNBC. “Their CEOs won’t say it publicly, but they’re saying it privately: The pay-TV bundle, the lifeblood of the U.S. media ecosystem for decades, is dying.”

Agree or disagree with this view on the exact nature of this relationship between Television and streaming services, the fact remains that that as streaming grows, the shape of national TV changes along with it.

M&A Implications for Streaming

Currently, Disney, AT&T, and Comcast (among other household name corporations) are all working to build out streaming platforms to compete with established streaming services provided by tech giants, like Netflix & Amazon Prime, as well as the upcoming release of Apple+.

Stay tuned to the MediaRadar blog for an upcoming post diving deeper into these services, from the role these mergers and acquisitions played, to the challenges and implications of these new streaming services fighting for dominance in the streaming and OTT landscape.

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