Not a month goes by without the audio-visual sector announcing a merger, takeover, or major alliance. We are witnessing a reconfiguration in the audio-visual scene to meet changes in technology and on-demand viewing, but also to withstand the emergence of platforms that are deriving profit from the services they offer across the world. For players in television, competition is now national and global.
Competition is raging in the audio-visual sector and the reconstitution of the landscape is in full swing at every level: in content production, among channel or service publishers and the stakeholders who make them available to a public audience. Following the emergence of telecom operators – those “access providers” who helped switch TV broadcasting from terrestrial, cable and satellite networks to the internet – and YouTube which popularised video usage, traditional players have been shaken up by the rapid rise of players in streaming and video OnDemand (SVOD and AVOD) and Over-the-Top services (OTT).
Whilst Netflix, Disney+ and Amazon Prime Video (the major winners in the health crisis, with over 500 million subscribers between the three of them worldwide) Apple TV and Rakuten TV are designing and capitalizing on their catalogues globally, private, and public broadcasters are being swept along in a race to achieve critical size, through alliances and increasing vertical integration. In La Nouvelle Économie de l’Audiovisuel (The New Economics of the Audiovisual World), Alain Le Diberder notes that “the primary factor for change [in the audio-visual sector] is not technology but globalisation”[1].
While the longstanding practice in the US of major takeovers between “pipeline” and content operators still continues, such takeovers now include this international dimension. Since 2018, the pay-TV company Sky has been backed by Comcast. That same year, AT&T merged in the US with Time Warner. In May 2021, this operator announced its intention to merge WarnerMedia with Discovery by the end of 2022 in order to expand broadcasting- on-demand through HBO and Discovery+.
AMERICAN PLATFORMS
CONVINCED THE AUDIOVISUAL
GROUPS TO LAUNCH
AND THEN CONSOLIDATE
THEIR OWN MULTI-TERRITORY
SVOD PLATFORMS
Competition from American platforms and the migration towards programmes OnDemand convinced the audio-visual groups to launch and then consolidate their own multi-territory SVOD platforms. This is what NBC did in the US with Peacock, ViacomCBS with Pluto TV, Disney with Hulu and Disney+, TimeWarner with HBO Max, Discovery with Discovery+ and so on. In France, 6play (Groupe M6), MyTF1 (TF1 Group), france.tv (France Télévisions) and arte.tv (Arte) are combining catchup or replay and increasingly including exclusive “nonlinear” programmes. In the UK, the BBC launched its iPlayer service before forming an alliance with ITV through BritBox.
RTL Group, with its intention of building national streaming champions, operates the RTL+ platform in Germany and Videoland in the Netherlands. “Innovation is not just driven by the major techno logy players, but also by long-established groups who have gradually adopted some of the strategic bricks of the GAFA models”, notes the global innovation agency, Fabernovel[2].
Concentration also provides the opportunity to rationalise the products and services offered. Following their merger in 2019, CBS and Viacom were able to overhaul their different platforms to produce a new Paramount + service. It has been broadcasting in various territories since March 2021 and is due to be rolled out in Europe in 2022. Players who had to date been competing with one another now surprisingly contemplate new alliances. In August 2021, Comcast and ViacomCBS decided to unite forces in launching a shared SkyShowtime SVOD platform, which is due to be launched in over twenty European countries in 2022. In France, TF1, M6 and France Télévisions launched Salto in October 2020. In spring 2021, when RTL Group wanted to refocus on German market consolidation, its share holder, Bertelsmann, decided to sell its stake in the M6 Group in France and accepted a bid from its main competitor, the TF1 Group. This project, which is the largest transaction conducted in Europe in the last 20 years, has entered into a merger phase which will go on until the end of 2022.
Competing service offerings are coupled with competition with regard to content. Several media giants have taken significant positions in the supply chain. Back in 1994, Viacom acquired the Paramount studio, Comcast did the same in 2016 with Dreamworks Animation and Disney bought 21st Century Fox at the end of 2017. Marking a sign of the times, in May 2021, Amazon bought up MGM studios, gaining control of a catalogue of some 4,000 films, including the James Bond franchise, as well as 17,000 TV programmes.
FOR COMPETING
AGAINST GAFA
ARE IMMENSE
The audio-visual production sector has also seen significant concentration, enabling the main players to launch international projects and work for SVOD platforms. In 2020, when it bought up Endemol Shine, al ready the result of the 2015 merger of the two groups, Banijay Group became the world’s largest TV production company. The group, which includes 122 companies in 22 countries, can thus launch around forty new formats a year. Fremantle, an RTL Group subsidiary, also has an established global presence which it has expanded in all TV genres, having built its reputation on gaming. The TF1 Group has incorporated Newen, which is now present in seven countries. Since 2015, Mediawan has developed its activities beyond the broadcasting sphere and now includes 30 pro duction labels and companies.
Market concentration admittedly offers stakeholders a stronger financial footing, regardless of where they operate in terms of links in the chain, but the requirements for competing against GAFA are immense, with the latter enjoying the backing of powerful investment funds. In Alain Le Diberder’s view, “the European audio-visual industry’s greatest weakness certainly does not stem from any lack of creativity or talent on its part, nor even from its dispersal between national markets. It lies, rather, in its weak support from the European financial sector.” /
[1] Alain Le Diberder, La Nouvelle Économie de l’Audiovisuel, Collection Repères Culture Communication, La Découverte, 2019.
[2] Its GAFAnomics – Quarterly report, analysing the tech giants’ results for the second quarter of 2021, published in September 2021.
