SVoD shaking up the market
Analysts highlight Disney / Fox mega-merger as evidence of change
The shockwaves of the Disney / 21st Century Fox mega-merger sparked a wide-ranging debate at Natpe about the growing influence of the SVoD giants.
Speaking at the Miami event earlier this week, Wall Street analyst Michael Nathanson compared the likes of Amazon and Netflix to Games Of Thrones’ “invaders from the north”, the White Walkers, and said they were changing the structure of TV.
“The industry previously always worked in protected, appointed lanes, but the speed of change now means that people no longer stay in them,” the MoffettNathanson senior research analyst said.
“They are converging and competing with each other in unexpected ways.”
Disney’s proposed £39bn takeover of the bulk of 21st Century Fox will merge businesses as varied as ABC, ESPN, FX and Marvel into a single entity.
In a separate session at the market, Sony Pictures Entertainment boss Tony Vinciquerra suggested his £43bn business had become a “little minnow” that now competed with rivals such as £650bn Apple. He predicted a range of “partnerships and mergers” would follow.
Elsewhere on the analyst panel, JP Morgan Securities managing director Alexia Quadrani suggested that the success of Amazon and Netflix could cause traditional media companies to reconsider selling their programming to SVoD services.
Ahead of its proposed merger with Fox, Disney pulled its programming from Netflix in preparation for launching its own portfolio of subscription services.
“If [studio] sales are cut short, it will be interesting to see how that changes the SVoD ecosystem,” she said.
Quadrani predicted that “slow-burn drama will have to go away” because consumers’ attention span is reducing due to the rapid rate at which dramas are released.
Breaking Bad
“Shows like FX’s Breaking Bad, where you had to watch a bunch of episodes to get into it, will have a harder time becoming successful,” she said.
An analyst poll showed that the declining effectiveness of TV advertising was the “biggest change that no one was talking about,” followed by shrinking media sales and a slump in the popularity of sports programming.
Despite the latter, Morgan Stanley managing director Ben Swinburne predicted the most significant battleground will be securing sports rights and the power of live programming.
Speculation has swirled around whether Amazon is gearing up to mount a bid for Premier League rights, adding to a portfolio that includes NFL Football League, US Open and ATP World Tour tennis. Swinburne dubbed sports rights “the glue of our world”.
The poll also revealed that Amazon is considered the greatest threat to traditional media, followed by Netflix, Facebook and then Google.
Swinburne flagged that Jeff Bezos’ business was emerging as a cable company in its own right, due to its bundling of billing, retailing and marketing.