Manoj Jagyasi and the promise of Bharat24
MUMBAI: Referred to as the turnaround man amongst kith and kin, Manoj Jagyasi was recently appointed as a chief busin
MUMBAI: The entertainment, media and communications (EMC) sector deal activity is expected to remain active in 2013 in the US as market players further invest to keep up with consumer demand for more bandwidth amid increasing content consumption, according to PwC?s 2013 U.S. Deal Insights for the Entertainment, Media & Communications industries. Additionally, as more companies continue to assess their portfolios and divest non-core assets as part of their go-forward strategy, PwC anticipates divestitures will be key contributors to deal values for the sector in 2013.
PwC US entertainment & media deals partner Bart Spiegel said, ?EMC companies are re-evaluating their current portfolios and proactively executing on strategies that address the consumers? shift to digital consumption. This may translate to monetising certain assets in the near term to provide capital for their go-forward strategy. Additionally, established market players are looking outside the U.S. for opportunities to leverage their existing asset base and increase their scale and reach to a global audience.?
With the fast evolving EMC landscape, PwC expects deal activity to center around the following five key themes:
Consumer demand for bandwidth drives need for spectrum - The communications industry is expected to experience continued consolidation in 2013, primarily driven by the growing consumer demand for bandwidth to support content consumption, social collaboration and location-based services. In an increasingly saturated U.S. market with limited spectrum options, operators are taking the M&A route to garner additional spectrum, geographical coverage, subscribers and more robust product and service portfolios.
The race for content - The demand for content continues to increase valuations for content creators and companies with established content libraries and intellectual property (IP) rights available for franchising, licensing, and IP expansion. As content creators bring their companies to market, potential buyers are also looking for a level of security on prospective cash flows. This may hinge on keeping the existing development team incentivised and motivated post-transaction to replicate past successes.
Looking abroad for cross-border M&A - The demand for content has fueled M&A activity both domestically and internationally. Market players are increasingly exploring international markets for quality content to fulfill demand. Additionally, international broadcast assets are likely to remain potential acquisition targets in those territories with strong GDP and EMC growth forecasts.
Non-core divestitures - PwC expects divestitures to be primary contributors to deal value as more companies seek to monetize their investments and exit non-core assets as a means to improve liquidity, increase profitability, and allocate capital to those business units that best reflect their go-forward strategy. This scenario is especially prevalent in the publishing sub-sector of EMC, as these companies have been most impacted by the shift to digital consumption.
Digital delivery blurs the line between technology and EMC companies - Technology companies continue to change the media landscape and how content is consumed. This further complicates existing business models while offering new revenue stream opportunities, such as downloadable content, micro-transactions and addressable advertising. At the same time, many traditional EMC companies are experimenting with new direct-to-consumer digital distribution models. PwC expects technology companies to continue to invest in the EMC sector and serve as a catalyst to how consumers experience content.
?More than any other sector, EMC companies are ahead of the pack in pursuing deals, partnerships and joint ventures to address the accelerated pace of change in consumer behavior. Media companies are investing in robust content management systems and dynamic analytics to not only operate efficiently but also to take advantage of new opportunities,? added Spiegel.
By the Numbers
According to PwC?s Deal Insights, EMC deal volumes in the fourth quarter of 2012 reached the highest level since the first quarter of 2011, with robust deal volumes expected to continue this year. While cumulative EMC deal volumes declined from 931 to 839 from 2011 to 2012, the announced deal value increased from $55 billion in 2011 to $96 billion in 2012. EMC sub-sector deals for 2012 were led by communications, recreation & leisure, internet software & services (ISS), film/content, cable and broadcasting, which all saw significant increases in disclosed deal value from 2011.
PwC?s EMC Deal Insights is an annual analysis based on data for US companies acquired by either domestic or foreign acquirers (both corporate and private equity) where deal value is reported, as provided by Thomson Reuters through December 31, 2012 and supplemented by additional PwC research and analysis. Information related to previous periods is updated periodically based on new data collected by Thomson Reuters for deals closed during previous periods but not reflected in previous data sets.
switch
switch