Insights is a new weekly series featuring entertainment industry veteran David Bloom. It represents an experiment of sorts in digital-age journalism and audience engagement with a  focus on the intersection of entertainment and technology, an area that David has written about and thought about and been part of in various career incarnations for much of the past 25 years. David welcomes your thoughts, perspectives, calumnies, and kudos at, or on Twitter @DavidBloom.

This installment of Insights is brought to you by Beachfront RISE. RISE

Comcast’s $3.8 billion DreamWorks Animation acquisition and that long-baking Yahoo sale are only the latest M&A deals in digital content, part of an epic gold rush in an industry that still hasn’t figured out how to pay for itself. Amid all these eye-popping deals come some conflicting trends that inspire one big question: Has the digital gold rush just begun, or are we nearly done?

Some factors to consider:

  • Peak TV? Or Peak Peak TV? Last year, FX President John Landgraf warned that networks were making more shows than people could actually watch. This year likely won’t be much different, as networks try to lock in loyal, cross-platform audiences. But the economics aren’t any prettier. Will networks’ parent companies (whose TV units have driven profits) be buying more, or retrenching?
  • Peak Pay-TV? Pay-TV providers have faced concerns for a few years about too-pricey packages and the ensuing cord-cutting and soft subscriber numbers. That culminated last summer in Wall Street’s media meltdown in share prices. Where will pay-TV platforms extract the cash for further deals, if revenues plateau while networks still push for higher fees?
  • Peak SVOD? SVOD streaming services are proliferating far beyond Netflix, Hulu and Amazon. Vessel, Vimeo On Demand, YouTube Red, Ellation’s CrunchyRoll, Fullscreen, HBO Go, CuriosityStream, CBS All Access, NBC’s Seeso and many others now offer monthly subscriptions. But a new GfK study suggests consumers may be reaching the limit of what they will pay for these services. They’re also getting grumpy about the proliferation of services. Will SVOD, like traditional pay-TV, soon hit a ceiling?
  • Peak Internet. Mary Meeker’s annual State of the Internet presentation suggests digital growth is slowing, and heading to mobile, with big players best positioned to do something about it. Where does that leave everyone else?
  • Live Streaming? I’m not completely persuaded that live-streamed digital video will rule. But Jeff Bezos and Mark Zuckerberg believe otherwise, and their track records suggest some patience. No one’s showed any capacity to make money directly from live streaming yet. More importantly, if people watch live-streaming video, they’re not watching everything else. Will this sector drive revenue, deals or distractions from “old-line” digital media providers?
  • A Chilly Market? Venture-capital funding is down a third since its peak in Q3 2015, from $39 billion to $25.5 billion, according to a CB Insights study. And IPOs have virtually stopped in much of the tech sector over the past several months.
  • What’s left? Traditional U.S. and European media companies drove the M&A gold rush as they pretty much all bought into MCNs and other digital media sites the past three years. And Disney is still hunting, if its latest Vice deals and rumored interest in BAM are any indication. But how many such big targets remain? A much-predicted ad-tech shakeout also hasn’t hit, though it may still happen as continuing business shifts push out extraneous middlemen.
  • Going web-free? How many digital publishers will forgo running their own site to focus on super-serving fans through someone else’s distribution platform? What do these web-free media companies look like in a few years? What are they worth if they don’t “own” their audience with their own site?

All is not grim and clouded, however. Countervailing trends and smart companies still could drive growth, opportunities and M&A for some time to come:

  • Going global. Netflix, for one, is clearly focused on international. Already this year, it expanded to more than 190 countries, launched its first French-language show (Marseilles), syndicated Narcos to Univision and announced a series of other Spanish-language series along with its first bilingual Hindi-English series. With its U.S. market near saturation, overseas is Netflix’s biggest growth opportunity. Others may conclude the same thing and go hunting for deals.
  • Verizon and AT&T. Thank goodness for mobile. Verizon and AT&T are positioning themselves to dominate a mobile-first, video-first world by acquiring content and ad-tech companies (thus AOL and Yahoo, among much else). They have the revenues and the reasons to keep buying and building.
  • Whither Bezos? Really, this goes for all the big digital companies that make money selling something other than media, but use it to draw and retain customers. So, not just Amazon, but Facebook, Apple, Google and an evolving Microsoft. Google, by the way, now controls 12% of worldwide media spend, according to Zenith Media. For comparison, No. 2 Disney is 166% behind. That is not a typo. Google is doing this while not actually owning, really, any content.
  • Whither Katzenberg? The talk has been that, once the DreamWorks deal closes, Jeffrey Katzenberg will head a spinoff digital unit that includes AwesomenessTV. Given his dealmaking success around Awesomeness, what might Katzenberg do with a digital media company that isn’t saddled with  the headaches of running a too-small, publicly traded movie studio?
  • Messaging? Snapchat’s almost absurdly big latest raise, $1.8 billion, makes it the most prominent of a set of gigantic messaging platforms that include Facebook’s Messenger, Instagram and WhatsApp, Kik, Oovoo, Line, and Chinese giants such as Weibo and Tencent’s WeChat and QQ. Will the messaging companies buy media assets to expand their platforms into new kinds of services?
  • More traditional-media consolidation? Digital acquisitions may slow, but expect further big deals as traditional companies restructure. Apple briefly broached a deal with a disinterested Time Warner, and corporate shakeups at Viacom and Sony reinforce rumors that their TV and film units may be in play soon.
  • Virtual Reality? Lots of players have jumped into VR and augmented reality, for hardware, content and ad services. The investments likely will continue, but remain well ahead of any monetizable entertainment market, except in videogaming and branded content (not to mention non-entertainment areas such as corporate training and healthcare).
  • Old School Tries to Go New. Former print giants such as Time Inc., Gannett, Condé Nast and tronc (née Tribune Publishing) are trying to recast themselves for digital with a curation and content gloss. These transitions haven’t been pretty, as many of my former colleagues can painfully attest. But these recastings may drive more deals, between consolidations (Gannett/tronc) and makeovers (Condé Nast Entertainment’s radio and TV programming, apps and

So, all things considered, I’m guessing the deals likely will continue for a while to come, amid restructurings, spinoffs, consolidations and acqui-hires, and despite a slow, if still growing, economy. But we’re also a few years into the digital-media transition. Now comes the hard and complicated work of actually running integrated media companies that can reach passionate audiences with content, advertising and SVOD offerings on an array of platforms.

Most of the dealmaking so far has not shown it can consistently lead to sustainable revenues, never mind profits, especially for content beyond the YouTube mothership. Creating companies for the long term will be the challenge as these businesses continue to mature, and audiences find new ways to enjoy exactly the content they want, wherever they want to watch.

RISEThis installment of Insights is brought to you by Beachfront RISE, the premier app building company that houses all of your content in one place for any device, and monetizes it automatically with their built in programmatic video advertising platform.

Facebook Comments

Don't miss out on the next big story.

Get Tubefilter's Top Stories, Breaking News, and Event updates delivered straight to your inbox.

This information will never be shared with a third party