MediaTech Radar is a monthly newsletter put together by IABM’s Head of Knowledge Lorenzo Zanni. It focuses on a spotlight topic in MediaTech and reflects on a series of past, present, and future business developments in the industry. In this edition, our spotlight topic is NAB Show 2024 Preview.

MediaTech Spotlight: NAB Show 2024 Preview

A spotlight topic in MediaTech.

• NAB Show will take place next month (I’ll be there; get in touch if you want to book a meeting with me) which gives me a great opportunity to explore what I think will be the hot topics (and questions) at the show – I have shared 10 below:
• Profitability: The sector’s profitability has been under pressure between 2023 and 2024 due to the toll exerted by the move to streaming business models. Several media companies have been managing costs by reducing staff to improve their profits (see some examples below the Watchlist), and this will surely affect conversations at the show.
• Consolidation: I talked about this topic at length in my last newsletter. It is top of mind for everyone in the media industry as the sector struggles with the transition to streaming business models. Recent deals at the end of 2023 and in Q1 2024 have signaled increasing M&A activity. No doubt this will be talked about at the show.
• Efficiency: The need for consolidation stems from a financial struggle with streaming. This struggle is also leading media companies to adopt technology that can make their operations more efficient. The search for efficiency will therefore continue from last year’s show, and many industry solutions will be focusing on it.
• Gen AI: Gen AI will continue to be a hot technology topic at this year’s show, particularly as media businesses strive to become more efficient. As I said in a newsletter at the end of last year, I do not expect AI to rapidly disrupt our industry just yet but rather to bring gradual (and surgical) change to (predominantly repetitive) media workflows, at least for now.
• Cloud: IABM research has shown that, in 2023, cloud investment decreased and then recovered on the back of AI spending. How will cloud investment in media fare this year? AI will continue to be a spending driver though some media companies may also continue to question the viability of cloud economic models in some areas of the industry.
• Democratization: We have seen that MediaTech is becoming more usable and accessible to appeal to markets other than broadcast and media. I will continue to look for signs of this on the show floor: everything ranging from slicker UIs to features borrowed from other sectors and, perhaps, more individual content creators attending the exhibition.
• Live Streaming: In my last newsletter, I mentioned that Disney, WBD and Fox joined forces to launch a joint streaming service and that Netflix agreed a $5bn deal with WWE to stream its wrestling shows for a decade. These are two major deals (and not the only ones in this area) which will probably put a spotlight on live streaming technology at the show.
• Interactivity: The other interesting deal (mentioned in more detail below) that happened recently is Disney’s investment in Epic Games. In fact, media companies engaging with consumers in less conventional ways such as games, and, more generally, with more interactive experiences, is something we might see more of at the show.
• FAST: FAST was already a big topic at last year’s show and at IBC. Since then, the number of FAST deployments has been rapidly rising. With over 1,500 FAST channels operating in the US as of January, the topic of monetization in a highly competitive environment may particularly be under the spotlight at this year’s show.
• Resilience: There is a plethora of trends requiring MediaTech companies to be resilient. Supply chain disruption, talent shortages, security, sustainability, and geopolitical uncertainty are among these, and they are all becoming more important in the sector. Expect them to be integral parts of discussions at the show as well.
• We will be talking about all these topics and other industry challenges at our State of the Industry Briefing in Vegas.

MediaTech Watchlist: Disney/Epic, Sky, ISE 2024, and more…

A watchlist of selected past, present and future business developments in MediaTech.

• Disney invested $1.5bn in Epic Games in February. This is a big sum that will allow the company to collaborate with Epic on new games that will enable users to engage with franchises such as Star Wars in a different fashion. This is another sign of convergence between broadcast and gaming. We have reported that this trend slowed down significantly last year due to macro pressures, though we have always said that changing consumer viewing habits will sooner or later require media companies to offer more interactive experiences to their customers.
• To recap on Disney’s history with interactive entertainment: the company first hired a gaming executive from Apple to lead its newly founded next-gen division focused on the Metaverse and started developing a betting app proposition post-pandemic. However, that next-gen division was axed in March 2023, presumably due to cost-cutting – the company continued its investment in betting with a $2bn investment in the ESPN BET initiative in August 2023. Having retreated from the Metaverse, Disney may now be focusing on combining gaming with its loved franchises and blending betting with sports streaming.
• In our last newsletter, we talked about layoffs in the technology industry. At the start of February, Sky announced that it would cut 1,000 jobs due to a long-anticipated switch from satellite to digital. As reported by the IBC365 article citing this news, a spokesperson for Sky said: “Increasingly, customers are choosing Sky Glass and Sky Stream which don’t require specialist installation, and that has led us to change the number of roles we need to deliver our services.” This is yet another sign of the decline of satellite as a distribution medium.
• I attended ISE 2024 between January and February. The show was buzzing – it attracted about 74K unique attendees. At the show, I chaired a panel of MediaTech suppliers focused on the convergence between broadcast and pro-AV – the session was part of ISE’s conference stream on Content Production & Distribution. The panel’s consensus was that non-media organizations are increasingly investing in content, and particularly video content, to engage with consumers and tell a story about their brand. Interestingly, it was also evident that MediaTech suppliers are sometimes struggling to reach the right audience at non-media organizations – the key decision-makers purchasing MediaTech.
• Total spending on film and high-end television production in the UK in 2023 fell by 32% compared to 2022, largely due to the strikes in Hollywood, as reported by BFI.
• Nikon acquired RED at the start of March, with Nikon aiming to expand into the cinema market with this acquisition.
• Paramount also announced layoffs in February with CEO Bob Bakish saying that the company’s priority is profitability and stating: “We’ll get there by growing our revenue while closely managing costs.”

Thank you for reading this newsletter. If there are topics you would like me to cover or have information/ideas you’d like to share, please get in touch with us.

Lorenzo Zanni

Head of Knowledge

IABM

MediaTech Radar is a monthly newsletter put together by IABM’s Head of Knowledge Lorenzo Zanni. It focuses on a spotlight topic in MediaTech and reflects on a series of past, present, and future business developments in the industry. In this edition, our spotlight topic is Media M&A.

MediaTech Spotlight: Media M&A

A spotlight topic in MediaTech.

• As mentioned in my previous newsletter, M&A activity in the media industry is expected to significantly increase in 2024 despite difficult economic conditions, including higher interest rates. The impact of the rising pressure on streaming business models and the Hollywood strikes in 2023 have been leading industry players to consider consolidation despite an uncertain business environment.
• Most players that launched streaming services to compete with Netflix have found themselves in dire straits in 2023, particularly as investors pivoted their focus from subscriber growth to profitability. Most streaming services – aside from Netflix, ironically – remain unprofitable and have taken difficult paths to reach profitability through a series of cost reduction initiatives. This seems to not have been enough to weather the storm.
• In December 2023, rumors of a mega merger between Warner Bros Discovery (WBD) and Paramount Global first emerged. The two players have been grappling with loss-making streaming operations, underperforming linear businesses as well as mounting debt piles to finance their moves to DTC – in an unfavorable macroeconomic environment. Paramount’s owner is rumored to want a sale while WBD’s CEO David Zaslav said at the company’s Q3 2023 earnings call that there were a lot of “excess players” in the market, which suggests a potential move by the company soon.
• At the start of January 2024, WBD made its first move, acquiring Turkish streamer BluTV. Other significant deals happened between December 2023 and January 2024. For example, RTL sold its Dutch TV and streaming business to DPG Media for €1.1bn in December while Lionsgate acquired eOne for $375m in January. In February, Disney, WBD and Fox joined forces to launch a joint streaming service in a landmark deal, aggregating their respective linear sports offerings.
• These are not small deals and signal a potential reshuffling of the media ecosystem in 2024. Predicting what the future ecosystem will look like is extremely difficult though I can see both production and distribution being affected by consolidation due to the drivers and signs mentioned above – see this as an example of pressure on the UK independent film sector.
• Consolidation is a big deal for technology investment too, as it often results in lower overall spending due to synergies between customers as well as a decrease in the number of opportunities for MediaTech businesses – these opportunities do however get bigger. Further consolidation in the media business should have a plethora of effects, including increasing M&A activity in MediaTech in response to this trend (we have already seen some signs of further supply-side M&A, see this as a recent example) as well as a rising number of MediaTech businesses pivoting to non-media industries.
• Is further consolidation really the answer to the industry’s challenges? The sector tried this before (multiple times) though, perhaps, there was just not enough consolidation? I am not too convinced that consolidation will be the main driver of future growth in the industry – let me know if you have any thoughts on this matter. Despite my doubts on this, consolidation should become a top trend to watch for in 2024.

MediaTech Watchlist: Netflix/WWE, Layoffs, CES 2024, and more…

A watchlist of selected past, present and future business developments in MediaTech.

• In a flagship development in the streaming wars, Netflix agreed a $5bn deal with WWE to stream its wrestling shows for a decade, starting in January 2025. The deal is so far limited to North and Latin America.
• This is an interesting deal for various reasons. Firstly, Netflix has now joined the group of streamers that have invested in live sports despite being late in this race and dismissing its interest in the genre multiple times in the last few years – does this mean that live content is now an essential weapon in a streamer’s arsenal? Secondly, wrestling is a hybrid between sports and entertainment, which fits well with Netflix’s inclination to tell stories around sports – something we have seen more of recently. Thirdly, and perhaps most importantly, WWE’s content slate will enable Netflix to stream new live content every week – in the last newsletter, we talked about the importance of constantly refreshing content pipelines for streaming platforms in relation to Netflix’s release of its first Engagement Report.
• This deal also means that Netflix has one year to develop technology to live stream WWE’s content – this is no easy feat. How this content will be monetized remains to be seen though we can argue that the streamer will probably leverage advertising.
• Another wave of tech layoffs took place in January 2024 as companies such as Google and Amazon decided to let go thousands of employees. According to the tracker fyi, layoffs in the tech industry in 2023 were 262,582 – up by 59% from the 2022 figure. We should expect consolidation to affect this trend as well, as evidenced by this example.
• At Amazon, the layoffs focused on its media divisions, including Twitch (35% of the streamer’s staff was cut), Audible, Amazon Prime Video and MGM Studios. Their supposed aim is to alleviate the profit losses that Amazon’s entertainment divisions are experiencing, consistent with the entertainment market pivoting from growth to profitability, as mentioned earlier. Analysts attributed Google’s layoffs to various reasons, including an increasing focus on GenAI at the expense of other areas.
• A recent World Economic Forum survey has found that a quarter of CEOs worldwide expect that Gen AI will lead to job cuts of at least 5% this year (FT, requires subscription), with media & entertainment topping the list of industries predicted to be impacted by the technology.
• CES 2024 took place last month in Las Vegas. It delivered over 135,000 attendees and 4,000 vendors, continuing its significant improvement from its 2022 figures and up from 115,000 in 2023. Attendance was, however, still lower than the 171,000 people it attracted in 2020, right before the arrival of the pandemic.
• Sony called off its $10bn merger with Zee Entertainment in India in January (FT, requires subscription). Sony’s issues with the merger included an investigation into fraud allegations against Punit Goenka, Zee’s CEO, and Zee’s financial performance which had been negatively affected by rising streaming costs and slower advertising revenue growth.

Thank you for reading this newsletter. If there are topics you would like me to cover or have information/ideas you’d like to share, please get in touch with us.

Lorenzo Zanni

Head of Knowledge

IABM

In this IABM TV Interview, Stan Moote, IABM’s CTO asks Philippe Bernard, CEO Globecast about some specific examples of how they have assisted companies worldwide to adopt cloud operations. One such company runs over 1,000 channels. Philippe has a great way to explain how the CAPEX-OPEX shift improves the use of technology rather than controlling it.

MediaTech Radar is a monthly newsletter put together by IABM’s Head of Knowledge Lorenzo Zanni. It focuses on a spotlight topic in MediaTech and reflects on a series of past, present, and future business developments in the industry. In this edition, our spotlight topic is MediaTech Convergence.

MediaTech Spotlight: MediaTech Convergence

A spotlight topic in MediaTech. 

• At the end of this month, ISE 2024 will take place in Barcelona. In previous newsletters, I have often talked about how this show has come to represent one of the most visible signs of convergence between broadcast and pro-AV technology – this is my report on ISE 2023. In this newsletter, I wanted to provide an update on this convergence and the drivers behind it.
• IABM research in 2023 has shown that the average percentage of revenues that MediaTech suppliers derive from non-media markets such as corporate and education has increased significantly, surpassing 50%. The corporate market has grown to become the most important non-media market served by MediaTech suppliers.
• We have also talked about the implications of this trend for suppliers. Their technology offerings have, for example, gradually become more adaptable (to different use cases) and usable (by non-technical staff) to increasingly cater to non-media markets. Moreover, some suppliers reported that they have had to invest in training and support capabilities to appeal to non-media customers – non-media buyers care about training and support more than their broadcast counterparts, according to our data.
• As reported in my previous newsletter, the broadcast market is currently under financial pressure due to an unfavorable macroeconomic conjuncture, which I expect will continue next year. Tightening budgets in broadcast and media might incentivize MediaTech suppliers to pursue opportunities in non-media sectors with more conviction, as highlighted by some suppliers this year.
• Arguably, the same trend does not apply to non-media organizations buying MediaTech. Take the English football club Manchester City as an example. When it reported a record £712m revenues in November 2023, the COO of its parent City Football Group Roel De Vries said (source: FT, requires subscription): “The majority of our fans don’t have the chance to physically come to the stadium every single game, so the biggest area we need to invest in is in the content part of the business.” You can see how this logic could also apply to large corporates wanting to engage more effectively with remote employees – yes, the move to hybrid and remote working is another driver of convergence.
• What about technology? Our research has shown that general-purpose technologies such as cloud and AI have become key trends in MediaTech, and this is a major driver of convergence between technology used in media as well as non-media industries. Other trends such as Gen AI and low-code/no-code development (and the combination of the two) promise to further democratize technology for the masses. While talking about these trends in relation to broadcast and media may seem far-fetched, there are already some examples of them in our sector – see the work done by Skyline Communications on low-code apps. Convergence, as well as other drivers such as talent shortages, may push these developments forward in 2024 – we shall closely watch them at ISE (I will be there – contact me if you want to meet at the show) and during the rest of the year.

MediaTech Watchlist: Netflix, Axel Springer, DAZN, and more…

A watchlist of selected past, present and future business developments in MediaTech.

• Netflix released its first Engagement Report, detailing viewing time for a plethora of titles on its platform, in December 2023. The dataset includes 18,214 original and licensed titles as well as the hours Netflix viewers spent watching them between January and June 2023. This analysis (FT, requires subscription) points out that this report is far from perfect as it does not include important variables such as genre and features missing data for other fields such as release date. However, the data does highlight some interesting trends in streaming viewing. For example, most of the top-performing titles in the catalogue were shows released between 2022 and 2023, highlighting the importance of constantly refreshing content pipelines for streaming platforms. Moreover, the data shows that, as you would expect, the big hitters are a very small minority of the total number of shows in the catalogue – this may not be the case in the future due to greater aversion to risk, as this article from Variety argues. Did you uncover some noteworthy trends in the report? Do email me with your thoughts, should you have any.
• In a landmark deal, news publisher Axel Springer partnered with ChatGPT creator OpenAI in December 2023. In a nutshell, the deal will allow OpenAI to use the news stories produced by Axel Springer’s brands, which include Politico and Business Insider, to train its Gen AI models, in exchange for an annual fee (reportedly “tens of millions of euros”). More importantly, the deal will also allow ChatGPT users to access (referenced) summaries of Axel Springer’s articles through ChatGPT – including stories that are included in subscriptions offered by Axel Springer’s brands. For OpenAI, this deal is arguably about legitimacy as it attempts to protect itself from potential regulatory backlash caused by its use of copyrighted information in training data. The key question is, however, what does this mean for news businesses? While the deal puts a price on news content, it may also stifle the incentive to pay for news as ChatGPT users will be able to access summaries of otherwise gated content.
• DAZN is reportedly in conversation with potential new investors to fund its expansion into new sports in 2024. DAZN’s losses between 2019 and 2022 have oscillated between $1bn and $2bn every year, though, apparently, its 2023 financials should reveal some improvements in the profitability of the sports streamer.
• Advertising prices in the US are expected to rebound next year from the deflation they suffered from in 2023 due to the combined impact of the end of the Hollywood strikes, elections, and important sporting events in 2024.
• Disney and Comcast increased ad spending on Instagram after pausing commercials on X.
• M&A in media will rebound in 2024 despite an unfavourable economic conjuncture, according to PwC. There have already been signs of this between the end of 2023 and the start of 2024 – more on this in the next newsletter.

Implementing A Flexible Monetization Strategy – A Brightcove Webinar

Date: Monday 4th December

Time: 2pm – 3pm UK Time

Media companies tend to use a monetization model that’s based primarily on their audience or their content. And that works…to a point. The problem is, the more narrowly defined your monetization model is, the more revenue opportunities you miss out on altogether. In this session, Brightcove will run through how best to choose your monetisation model, their strengths and shortcomings, and how these models can be refined for maximum revenue generation.

Key Topics:

• How are organizations choosing their monetization model?
  • Content type
  • Audience profile
  • Geography
  • Platform
  • Business expectation

 

• How are organizations acquiring their audience and how are they determining the ‘right audience’ for their business models?

 

• What type of content is driving sign-ups/registrations/trials?

 

• What approach (activities/initiatives/campaigns) are organizations using to
  • attract new customers
  • Convert trials to engaged customers
  • Save idle/inactive customers before they churn
  • Win-back their audience

 

• How are the organizations maximizing their monetization?