followthemedia.com - a knowledge base for media professionals
Big Business
Search / Email Story / Print Page /

Media Investment And The Big Squeeze

Getting money from the web is no longer about simply selling ads. There’s branded content, merchandising, talent management, all kinds of goodies. Multiple revenue streams excite investors, traditional ad money so last century. The quest for scale, however, is eternal.

make lemonadeBig French broadcaster TF1 Group and big Italian broadcaster Mediaset are taking stakes in big German broadcaster ProSiebenSat. 1 Group’s online video producer Studio71, subject to the advice of curious respective regulators. TF1 Group will acquire 6.1%, Mediaset 5.5%, each investing about €25 million. ProSiebenSat.1 is keeping 70%. With the completion of the transaction Studio71 will be valued at €400 million.

"The partnership with TF1 Group and Mediaset gives us access to key European markets where the online video market is just now really picking up momentum and promising significant potential," said ProSiebenSat.1 Group digital head Christoph Wahl. (See TF1 Group presser here)

Studio71 produces video content for the likes of YouTube, Facebook, Instagram, et.al.. It’s a growth industry, referred to by those in the know as multi-channel networks (MCN). Originally based in Berlin, it was formed in 2013 by ProSiebenSat.1 Group, which acquired principal interest Los Angeles based Collective Digital Studios in 2015, merging it all a few months later. Multi-channel networks are, essentially, subnetworks operating on YouTube and similar video platforms aggregating the work of independent producers.

TF1 acquired social media branded content producer and aggregator MinuteBuzz in December and invested in French MCN Finder Studios in partnership with French production house Makever. Finder Studios will eventually be “integrated” with Studio71, said offremedia.com (January 13). TF1 will manage Studio71 activities in France and saleshouse TF1 Publicité will develop revenue streams, targeting Millennials, as it does for Finder Studios, Makeover and MinuteBuzz. As part of the Studio71 transaction, ProSiebenSat.1 Group will take a “strategic minority stake” in Finder Studios, said Le Parisien (January 12).

Similarly, Mediaset will operate Italian interests and will own 49% of Studio71 Italia. Mediaset saleshouse Publitalia 80 will be charged with Italian ad sales. The MCN category in Italy is full of opportunity; meaning not much going on.

Every mention of Mediaset stirs questions about the failed attempt to offload suffering pay-TV subsidiary Mediaset Premium to French media group Vivendi. After Vivendi principal Vincent Bollore decided to scuttle the deal, something about financial reports, Mediaset principal Fininvest, essentially the Berlusconi family, called lawyers. Vivendi responded by calling bankers and acquired just under 30% of Mediaset shares, not quite enough to trigger the mandatory bid for the whole company. That thought sent the Mediaset share price soaring, possibly making a hostile takeover - if it was ever part of M. Ballore’s plan - impossible.

That battle of media titans simmers unresolved. Vivendi proposed, according to Bloomberg (January 11), offering a shareholding to Fininvest. According to Reuters (January 11), Fininvest hasn’t received this proposal and no negotiations are proceeding.

Media investors are painting bold strategies, largely on the canvas of new media. Modest deals, like Studio71, expand reach into new territories while capitalizing on emerging business models. Bigger deals - from, potentially, Vivendi/Mediaset to 21st Century Fox acquiring fully the multi-national Sky pay-TV business and, even, AT&T acquiring Time Warner - are about survival. And scale in the era of Google and Facebook, authors of the accepted business model, is everything. Nobody wants a corner lemonade stand.


See also in ftm Knowledge

Media Business Models Emerging

After a rough transition media business models are emerging. Challenges remain. There are Web models, mobile models, free models, pay models and a few newer models. It makes for exciting times. This ftm Knowledge file examines emerging business models and the speed-of-light changes. 137 pages PDF (January 2013)

Order here

ftm Resources


related ftm articles:

Blinking Is A Nervous Tick And Bad For Business
Executives are much happier exploring new opportunities than tackling headaches arising from the normal course of business. Shareholders are only happy when profits and dividends flow. The most successful - and thriving - management strategies keep sharp attention on happiness. When throbbing headaches invade the spirit pain relief becomes an object. Holidays are helpful.

Breathing A Lost Art When Media Investment Goes Hostile
The air between traditional and new media is both rousing and scary. One is powered by legacy, the other by change. These are strong instincts, in their own right. Different languages are spoken, time measured by the clock or the deal. Asset value descends from the great void rather than shelf life.

Ambition And The Slicing Machine
Ambition is the trait most rewarded by investors and customers, the difference only slightly nuanced. Technology companies have entered the media sphere - Netflix and Amazon, not forgetting Apple’s venture into music streaming - with the gleeful admiration from investors. Media companies have been on the back-foot trying to catch up with the techies. Consumers, of course, just want what they want right now, preference given to brands they know.


advertisement

ftm Knowledge

The Campaign Is On - Elections and Media – new

Elections campaigns are big media events. Candidates and issues are presented, analyzed and criticized in broadcast and print. Media is now more of a participant in elections than ever. This ftm Knowledge file reports on news coverage, advertising, endorsements and their effect on democracy at work. 84 pages. PDF (September 2017)

Order here

Fake News, Hate Speech and Propaganda

The institutional threat of fake news, hate speech and propaganda is testing the mettle of those who toil in news media. Those three related evils are not new, by any means, but taken together have put the truth and those reporting it on the back foot. Words matter. This ftm Knowledge file explores that light. 48 pages, PDF (March 2017)

Order here

The Millennials

In the media sphere nothing is more important than knowing the audience. Once in a generation a target group evolves to catch the attention of publishers and broadcasters, advertisers and media buyers, social critics and politicians. The Millennials, also known as Generation Y and digital natives, are it, with unique characteristics and behaviors. They have already reshaped everything we do. 35 pages, PDF (December 2016)

Order here

More ftm Knowledge files here

Become an ftm Individual or Corporate Member to order Knowledge Files at no charge. JOIN HERE!

copyright ©2004-2017 ftm partners, unless otherwise noted Contact UsSponsor ftm