Content & Delivery
Global media brands pursue full control
We anticipate signicant steps in the trend towards
vertical integration as major media companies seek
to control the whole chain, from production of content
to delivery into the home. Mirroring recent direct-to-
consumer initiatives in retail and services that bypass
the aggregator/retailer, it points to a future where one
company owns the studio, makes the programme and
distributes it exclusively on its own VOD platform – a
monolithic approach.
At its heart is a move away from content acquisition
towards production self-suciency. Disney is a major
example of this, now selling 93% of the content it
makes to services it owns.
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Other companies like
Warner Media and NBCUniversal are following suit.
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Meanwhile, Disney, Paramount and Discovery are
going direct to consumer, ending previous distribution
deals and launching their own VOD services – and
some media companies are even manufacturing the
TV set itself.
The pursuit of vertical integration makes for a highly
active market. As global demand for new content
soars – exacerbated by pandemic-related disruption to
the supply chain – companies like Netix and Disney
have been buying up studio space at an aggressive
rate. The UK and Ireland in particular are emerging as
signicant production hubs.
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Vertical
integration
and the rise
of direct-to-
consumer
The need for scale
Ampere Analysts estimate that an SVOD service
may need as many as 180–200 million subscribers
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in order to replace the revenue lost by not licensing
to third parties, however. Clearly this is a route open
only to content giants with the most established
and attractive intellectual property and access to
signicant marketing budgets.
Disney+ had 118m subscribers as of October 2021,
hoping to expand to 230–260m by the end of 2024.
Netix already had over 200m but growth is stalling
as the market saturates and wallets tighten.
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Independent and regional
production remain vital
Since ‘critical mass’ for a global service will be
beyond all but a handful of players with valuable
and extensive IP, independent production will remain
signicant. Smaller players in the market will nd
value in collaborating with others in order to
compete eectively.
Expect even more cases of national and regional
broadcasters collaborating, with co-productions and
SVOD and AVOD initiatives, and more partnerships
where broadcasters leverage the technology and
platforms of global giants. Recent co-productions
include the BBC in the UK and Canal 9 in Argentina
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both partnering with Amazon Prime Video.
Globo in Brazil has struck a content partnership
deal with Paramount’s Pluto TV platform
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and is
leveraging Google’s cloud technology to stream the
2022 Winter Olympics.
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We can also anticipate further aggregation and
consolidation as media companies react to the global
media monoliths.
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