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EVOLUTION OF MEDIA &
ENTERTAINMENT: HOW NEW TRENDS AND
MARKET CONSOLIDATION ARE
RESHAPING AN INDUSTRY
Master of Science in Management
Department of Business and Management
Course of Creative Industries and Business Model Innovation
Supervisor: Francesca Tauriello
Co-supervisor: Karynne Turner
ACADEMIC YEAR 2018/2019
Candidate Ilaria Lasco
Ilaria Lasco
2
This is causing structural changes in the industry of media and entertainment
Overview
Digitalization and OTT at the core of Media & Entertainment industry
Source: PWC "Perspectives from the Global Entertainment & Media Outlook 2019–2023”
Media & Entertainment plays a pivotal role in the economic growth and OTTs are leading the evolution
Global Media & Entertainment
revenues growth
2018-2023
CAGR 4.3%
Global digital revenues as a
% of tot. revenues
55,4% 61,6%
2019 2023
Global OTT video revenues as
% of TV subscription revenues
2018 2023
18,6%
35,4%
NOW
AUDIOVISUAL MARKET
Video revolution
Linear
Mass consumption
Cable
THEN
On-demand
Personalized
Internet
Ilaria Lasco
3
The audiovisual market
New competitive dynamics which are breaking up the balance of the markets and leading to market concentration
Incumbents are using M&A activity to face the growing competitive landscape and…
IMPACT ON THE MARKET
… “get ready to the streaming war” Robert Iger, CEO The Walt Disney Company
MAINTAIN
THE CUSTOMER BASE
REINFORCE
MARKET SHARE
STRENGTHEN THE IP
CATALOGUE
Internet distributed video contents
+11.6%
2018-2023
CAGR
Source: PWC "Perspectives from the Global Entertainment & Media Outlook 2019–2023”
Ilaria Lasco
4
2011-2013 2016-2018
Merger and Acquisition case history
Incumbents acquiring a leadership position in the new converging market scenario
“The media and communication industries are
converging and when it comes down to it, premium
content always wins”
AT&T CEO
$85,6bn
First vertical mega-merger between the US largest
cable provider and content provider
$30bn
Extending their control over the value chain not only makes them less dependent on their distribution activities; it also allows
them to tap into the lucrative content business.
Ilaria Lasco
5
Merger and Acquisition case history
Secure the ownership of
valuable franchises,
crucial against growing
competitors
VS
Planning to acquire the remaining
61% shares in Sky plc
VS
Gaining a
foothold in the
European
market
Deal value: $71.3 billion
Approval date: July 2018
Investing in a bundle of
OTT business
Deal value: £30.2 billion
Approval date: October 2018
Chance to expand business out of
US
“The launch of Disney+ is a historic
moment for our company that marks a
new era of innovation and creativity”
CEO The Walt Disney Company (12
November 2019)
Ilaria Lasco
6
IS THE FINAL CONSUMER SIGNIFICANTLY
MOVING TOWARDS OTT PLATFORMS
CONSUMPTION?
Ilaria Lasco
7
Investigate consumption patterns
Viewing device: fixed vs mobile
Television Set 44%
PC 30%
Smartphone 18%
Tablet 8%
87%
13%Free online
streaming
Subscription
to streaming
service
46% 54%
Gen Z32%
Millennials38%
Gen Y22%
Baby Boomers8%
USERS SAMPLE
Analysis of survey findings
Contents driving consumers’ choice
Original TV
series
Movies
Live sport
events
Documentaries
None
200 respondents
Number TV series consumed in 1 year
Between 2
and 556%
More than 5 26%
11%
7%
None
One
Subscriptions to at least 1 OTT service
60%
46,5%
23,5%
14%
13%
3%
Ilaria Lasco
8
Insights from survey findings
Consumers behaviour will guide industry response and evolution
Better-tailored pricing
Customized offering
Looking for a single entry point
Possible strategic response
Price-to-value proposition
Suceed as contents aggregators
Qualitative insights
Direct-to-consumers strategy
Ilaria Lasco
9
Outstanding points
Conclusions
Content
Always king
in entertainment and media
industries
Distribution
Fundamental in
digital environment
Context
Consumption evolution
Tech breakthrough
New opportunities
Which are the key elements to consider for long-term success in the
media landscape ?
‘‘
Ilaria Lasco

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Evolution of media & entertainment: how new trends are reshaping an indsutry

  • 1. EVOLUTION OF MEDIA & ENTERTAINMENT: HOW NEW TRENDS AND MARKET CONSOLIDATION ARE RESHAPING AN INDUSTRY Master of Science in Management Department of Business and Management Course of Creative Industries and Business Model Innovation Supervisor: Francesca Tauriello Co-supervisor: Karynne Turner ACADEMIC YEAR 2018/2019 Candidate Ilaria Lasco Ilaria Lasco
  • 2. 2 This is causing structural changes in the industry of media and entertainment Overview Digitalization and OTT at the core of Media & Entertainment industry Source: PWC "Perspectives from the Global Entertainment & Media Outlook 2019–2023” Media & Entertainment plays a pivotal role in the economic growth and OTTs are leading the evolution Global Media & Entertainment revenues growth 2018-2023 CAGR 4.3% Global digital revenues as a % of tot. revenues 55,4% 61,6% 2019 2023 Global OTT video revenues as % of TV subscription revenues 2018 2023 18,6% 35,4% NOW AUDIOVISUAL MARKET Video revolution Linear Mass consumption Cable THEN On-demand Personalized Internet Ilaria Lasco
  • 3. 3 The audiovisual market New competitive dynamics which are breaking up the balance of the markets and leading to market concentration Incumbents are using M&A activity to face the growing competitive landscape and… IMPACT ON THE MARKET … “get ready to the streaming war” Robert Iger, CEO The Walt Disney Company MAINTAIN THE CUSTOMER BASE REINFORCE MARKET SHARE STRENGTHEN THE IP CATALOGUE Internet distributed video contents +11.6% 2018-2023 CAGR Source: PWC "Perspectives from the Global Entertainment & Media Outlook 2019–2023” Ilaria Lasco
  • 4. 4 2011-2013 2016-2018 Merger and Acquisition case history Incumbents acquiring a leadership position in the new converging market scenario “The media and communication industries are converging and when it comes down to it, premium content always wins” AT&T CEO $85,6bn First vertical mega-merger between the US largest cable provider and content provider $30bn Extending their control over the value chain not only makes them less dependent on their distribution activities; it also allows them to tap into the lucrative content business. Ilaria Lasco
  • 5. 5 Merger and Acquisition case history Secure the ownership of valuable franchises, crucial against growing competitors VS Planning to acquire the remaining 61% shares in Sky plc VS Gaining a foothold in the European market Deal value: $71.3 billion Approval date: July 2018 Investing in a bundle of OTT business Deal value: £30.2 billion Approval date: October 2018 Chance to expand business out of US “The launch of Disney+ is a historic moment for our company that marks a new era of innovation and creativity” CEO The Walt Disney Company (12 November 2019) Ilaria Lasco
  • 6. 6 IS THE FINAL CONSUMER SIGNIFICANTLY MOVING TOWARDS OTT PLATFORMS CONSUMPTION? Ilaria Lasco
  • 7. 7 Investigate consumption patterns Viewing device: fixed vs mobile Television Set 44% PC 30% Smartphone 18% Tablet 8% 87% 13%Free online streaming Subscription to streaming service 46% 54% Gen Z32% Millennials38% Gen Y22% Baby Boomers8% USERS SAMPLE Analysis of survey findings Contents driving consumers’ choice Original TV series Movies Live sport events Documentaries None 200 respondents Number TV series consumed in 1 year Between 2 and 556% More than 5 26% 11% 7% None One Subscriptions to at least 1 OTT service 60% 46,5% 23,5% 14% 13% 3% Ilaria Lasco
  • 8. 8 Insights from survey findings Consumers behaviour will guide industry response and evolution Better-tailored pricing Customized offering Looking for a single entry point Possible strategic response Price-to-value proposition Suceed as contents aggregators Qualitative insights Direct-to-consumers strategy Ilaria Lasco
  • 9. 9 Outstanding points Conclusions Content Always king in entertainment and media industries Distribution Fundamental in digital environment Context Consumption evolution Tech breakthrough New opportunities Which are the key elements to consider for long-term success in the media landscape ? ‘‘ Ilaria Lasco