2022 will see “a double wave of merger and acquisitions” in the streaming market according to research by Ampere Analysis.
Ampere’s research director Guy Bisson suggests 2022 will “herald the start of a new wave of M&A activity that will position the TV market for on-going growth and align companies along the key verticals needed to service a global streaming-first TV content and distribution market.”
He suggests that this predicted wave will include two strands. One that will focus on content Intellectual Property where acquisition targets will include traditionally established TV production entities with a track record of creating character-driven content franchises, as well as publishers, games studios, comic creators, toys, music catalogues, TV and movie libraries and archives that have the same proven abilities.
The other wave is likely to see the return of large-scale vertical integration, “although the alignments will differ from the combinations that characterised the last great wave of content-plus-distribution mega-mergers in the nineties and noughties,” said Ampere.
Bisson predicts the waves will centre around two kinds of companies, which he terms Feeders and Deliverers. Feeders make content available for international licensing, while Deliverers are the consumer facing content platforms who make programming primarily for their own channel or streaming service.
“Feeders now need scale to survive in the new global TV market, so they will be aiming to grow their geographic footprint and the breadth of their production assets by executing classic horizontal mergers,” added Ampere. “As Feeders scale, they also become acquisition targets for the Deliverers, eager to make and access more content that meets the ‘capture and retain’ principle.”
In contrast to the Feeders, most of the Deliverers have emerged from already vertically integrated studio businesses or are new global streaming entrants such as Netflix or Amazon. They need a way to boost their ability to get in front of viewers on a global basis, adds the research
“The need to control global rights drove the first waves of production M&A activity as streaming took off,” states Bisson. “In 2022, content M&A will increasingly shift to focus on intellectual property, the control of characters and their associated fan bases. Already, 40 per cent of new streaming TV show commissions are based on existing IP so the future means not just controlling global rights, but also managing the source of new and franchisable content.”