2019: The Year in Review

World Screen looks back at the biggest stories in international media last year.

The closing of Hasbro’s $4 billion deal to acquire Entertainment One this week capped off a year of intense M&A activity that looks set to continue to reshape the media ecosystem in 2020. Of note last year, The Walt Disney Company officially closed its deal to acquire much of 21^st Century Fox and consolidated control of Hulu, CBS Corporation and Viacom agreed to merge and then took a 49-percent stake in Miramax and Banijay Group reached a definitive agreement to acquire Endemol Shine Group. Canal+ Group enlarged its European footprint with the acquisition of M7, an independent pay-TV operator. PPF Group became the new owner of Central European Media Enterprises and KKR & Co. acquired Germany’s Tele München Group. Newen, Mediapro and others expanded their footprints, as did Boat Rocker Media, notably acquiring Platform One Media in the U.S. This year, meanwhile, could see new ownership for Red Arrow Studios, which ProSiebenSat.1 is considering offloading, and Kew Media Group. And the likes of Sony Pictures Entertainment and Lionsgate continue to be cited as potential targets for acquisition as the need for scale intensifies.

The streaming wars also ramped up in 2019 as most of the major Hollywood studios made direct-to-consumer their number one priority. The much anticipated Disney+ formally arrived in November of last year, with further expansion of the SVOD service this year. Apple finally launched Apple TV+, positioned as the “new home for the world’s most creative storytellers.” NBCUniversal laid out its plans for Peacock and WarnerMedia unveiled HBO Max; both services become available this year. In the U.K., the BBC and ITV reached a deal to launch BritBox, promising the “biggest collection of British content available” on any streaming platform. Salto, the joint platform project from TF1, M6 and France Télévisions, is due to arrive this year. StarzPlay continues to expand across Europe and NENT Group is looking to broaden the reach of Viaplay. Meanwhile, the AVOD arena is getting equally as crowded, in the U.S. and globally. Pre-CBS merger, Viacom acquired Pluto TV and identified international expansion opportunities for the ad-supported service. Another U.S.-based AVOD platform, Tubi, also set its sights on the global market, rolling out in Australia and prepping a U.K. launch for this year. Amazon-owned IMDb launched a free streaming service in the U.S. and Europe. Joyn, from ProSiebenSat.1 and Discovery, rolled out in Germany in 2019 initially as an AVOD service and subsequently added a paid tier. Meanwhile, Sony pulled the plug on Crackle in Latin America (after shuttering the Canadian service in 2018) and sold a majority stake in the U.S. platform to Chicken Soup for the Soul.

Niche services are also booming. Canal+ Group launched its own stand-alone streaming service in France, Canal+ Séries. CuriosityStream landed new financing, which it plans to use to step up its international expansion this year, while Discovery and BBC Studios are partnering on a new global SVOD service. The foreign-language drama platform Walter Presents expanded to new markets in 2019. New kids’ and family apps popped up worldwide. A rash of sports services hit the market, with more to come.

How many subscriptions can consumers handle? According to data from Parks Associates last year, 46 percent of U.S. broadband homes had two or more OTT subscriptions, up from 33 percent in 2017 and 20 percent in 2014. “The number of OTT services available in the U.S. increased by 140 percent in five years, giving consumers an unprecedented number of options to meet their video needs,” said Steve Nason, senior analyst at Parks Associates. “Most OTT households are anchored by one of the three major OTT services—Netflix, Hulu, or Amazon Prime Video—but consumers are finding they can’t fulfill all their interests through a single service. Many small and medium-sized services are building their brand and subscriber base by filling in these gaps in content.”

Short-form content also generated a lot of headlines last year in the run-up to the launch of Jeffrey Katzenberg’s Quibi this spring. Snapchat, Facebook Watch and Quibi are leading the pack in a short-form content boom, per a report by Ampere Analysis in 2019. “Short-form content is growing strongly, and we expect to see it boom—both in English-speaking markets and Asia where it’s well-established,” said Olivia Deane, an analyst at Ampere Analysis.

Overall, Zenith forecasts that the average person will spend 100 minutes each day watching online video in 2021. “The average person will spend half as much time viewing online video as they spend viewing conventional television this year,” said Jonathan Barnard, head of forecasting at Zenith, in 2019. “This fast-expanding supply of audiences is fueling rapid growth in demand from advertisers, making online video the fastest-growing digital channel by advertising expenditure.”

Zenith reported last year that ad spend would rise by 4.7 percent to reach $623 billion in 2019, helped in large part by online video and social media. Internet advertising is forecast to account for 52 percent of global advertising expenditure in 2021. “Online video has boosted the amount of time that consumers spend watching audiovisual content and is amplifying advertisers’ ability to reach consumers with high-impact brand-building ads,” said Matt James, global brand president at Zenith. “The growth in serving ads to consumers via connected television sets will be a huge contributor to the growth of this format in the coming years, and it will help to bring attribution back to TV advertising.”

But as television ad dollars shift online, broadcasters are finding they have to do more with less, leading to uncertainty across the traditional content-distribution landscape. Program distributors have had to change how they do business, finding new ways to land access to content and cobble together the financing required. MIPTV, the second-biggest content market of the year, is itself having to find ways to adapt to the new realities of the market. Reed MIDEM announced at MIPTV last year that they were setting out a new vision for the show. A redesigned experienced was unveiled later in the year, but there is still uncertainty over what the event will look like this spring.

Uncertainty seems to be the overall mood of the media business right now. Political and economic strife in many markets is compounding the effects of seismic shifts in how content is monetized and consumed. Windowing and rights management is trickier than ever. Piracy appears to be getting worse (Parks Associates forecasted in 2019 that OTT and pay-TV companies would see $9.1 billion in lost revenue due to piracy and account sharing, with that number growing to $12.5 billion in 2024). The constant is consumers’ appetite for content. According to PwC, in 2019, U.S. consumers were spending roughly $76 a month on video content, an increase of $5 per month year-on-year. PwC’s survey found that 33 percent of consumers expect to invest more in new SVOD services, and 21 percent are willing to pay more to gain access to ad-free content.

But there will be some losers in the intensifying streaming wars. “The question for consumers is no longer ‘How do I watch?,’ but ‘What do I keep and what do I cut?,’” PwC said in a recent insights report. “Services that don’t provide their audience with a clear value proposition and a seamless user experience run a real risk of attrition in the future…. Consumers know how to get the content they want—64 percent of respondents who intend on subscribing to a new video entrant say they would downgrade or terminate one of their current video services to do so.”

Catch up on all these stories and more on WorldScreen.com, and look out for a reviews of the year in kids, formats, drama and factual.