Competition in the Media Industry

Netflix

Ivan Marc / Shutterstock.com

The Story

This Monday (19th Aug), Disney announced that it will begin its streaming television service called “Disney Plus” in November. It is seeking to rely less on cable channels and develop online streaming services which Netflix is currently dominating. As part of this plan, it acquired some of 21st Century Fox assets last March.

AT&T, America’s biggest phone company, also has similar plans. It acquired WarnerMedia last year with an aim to make use of its contents and is planning to launch a new online streaming service called “HBO Max” next year with exclusive shows not available on other platforms. Its premium content is said to amount to 10,000 hours.

Viacom and CBS agreed to merge last Tuesday to compete against streaming services rivals. This deal will combine CBS’s streaming services like CBS All Access and broadcast and news networks with Viacom’s TV networks like Nickelodeon, MTV and Comedy Central.

Impact on Businesses and Law firms 

The Financial Times described the current deals in the media industry as signals of “a second wave of media M&A”. According to Parrot Analytics, Netflix currently accounts for 68% of the demand for online streaming services. Netflix is followed by Amazon Prime Video, which accounts for 10% and Hulu, which accounts for 9%. Netflix’s secret to success being its bulk of original shows, other companies in the media industry are seeking for M&A deals with each other to quickly maximise the contents they provide to compete with the media giant. As more people move from TV shows to online streaming services, the number of M&A deals in the media industry is expected to soar. This is good news to many law firms which play central roles in these deals, from negotiating the initial deal to drafting the contract.

By Sara Moon

Leave a Reply