US consumers now have almost 400 streaming video services to choose from,1 driving intense competition for audiences that are carrying more subscriptions—and more overhead—to chase the content they want. The shift to streaming platforms and direct-to-customer (DTC) business models is creating a “Gold Rush” for players looking to acquire creative talent, technologies, and the content needed to attract and retain subscribers.2 This is a once-in-a-generation opportunity for players to amass scale quickly and potentially differentiate in an increasingly crowded marketplace.3
To remain in the game, media companies should rapidly integrate acquisitions, while delivering compelling new content and services. They cannot risk losing the attention of their customers in an environment where 53% of US consumers are frustrated by the need to manage multiple subscriptions, fueling high churn rates for video streaming services.4 But executing on M&A deals effectively in this dynamic environment is not easy, and doing so with an eye toward delivering enduring value to customers will likely be key to success.
Media companies should move quickly and decisively to combine newly acquired assets. Having a clear end-state vision for the combined organization and a plan to get there can be critical to achieving these goals.5
All this should be done in an aggressive timeframe to minimize distractions to both employees and consumers, and to quickly realize the cost and revenue synergies that can be critical to making the deal accretive. Assuming acquired companies can be integrated over time is a luxury that media acquirers can no longer afford. Value ultimately comes from aligned content and pricing, with a rich and seamless user experience delivered by optimized technology. This requires careful planning, in a competitive business environment that demands quick and seamless integration. As the historic shift to streaming video matures, successful mergers and acquisitions will likely have played a key role in determining who is still in the game.
Deloitte’s Technology, Media & Telecommunications (TMT) industry practice brings together one of the world’s largest group of specialists respected for helping shape many of the world’s most recognized TMT brands—and helping those brands thrive in a digital world.