What happened in 2017 - media industry news review for the year 2017
A year of consolidation
Media companies have realised that big is not only beautiful, but also a necessity for survival against the big guys (Google, Facebook etc.), with 2017 seeing some big and unexpected mergers:
- Disney buys Fox for $52 billion, as Murdoch sells up with the realisation that only the big will survive, as Amazon, Facebook, Apple & NetFlix all start to flex their content muscles Read more on BBC here >>
- Time Inc sells itself to Meredith for $2.8 billion, in a similar but less positive story for Time Inc, who unlike Fox are at a relatively low ebb in their history - making Murdoch’s move of selling Fox at the top seem all the more shrewd. Read more on New York Times here >>
- AdTech companies carry on trying to sell themselves, with a variety of sizeable deals happening in 2017 with the likes of Teads selling to Altice for $310 million, Moat selling to Oracle for $800 million and Turn selling to SingTel for $300 million.
A year when the big guys got bigger and stronger
As media companies consolidate, GAFA (Google, Apple, Facebook, Amazon) continue to grow at a terrifying pace:
- Facebook and Google’s share price and revenue continue to sky rocket in 2017, with Facebook’s share price up more than 50% and revenues at Google jump 24% - the majority from advertising.
- News of Amazon generating $1.3 billion annual revenue from advertising and Sir Martin Sorrell saying he was most scared of Amazon as a threat to his business (rather than Google and Facebook). Read more on Amazon's advertising business here >>
- NewsCorp goes to war with Google and Facebook, with NewsCorp targeting YouTube in particular - with ongoing investigative journalism pieces around dodgy YouTube ad positioning. Read more on Murdoch's anti-Google campaign here >>
A year of struggle
Whilst the big guys merged, there was also the start of consolidation amongst the smaller media owners as well as some indications that the mini-media unicorns (the likes of Buzzfeed and Vice) also being strongly affected by GAFA:
- Mashable’s fire sale for $50 million, having raised $15 million in 2016 at a valuation of $250 million, with suggestions that its bet on video didn’t pay off. Read more on Recode here >>
- Buzzfeed and Vice announce growth slow down and lay-offs, with BuzzFeed laying off 100 as it misses its revenue targets by c.15%. Read more on BuzzFeed here >>
- SnapChat’s IPO struggles, with its shares down to $14, from it’s IPO of $17 (losing c.20% of its value).
A year of transparency & power shifts to advertisers
The tables are finally starting to turn against digital media owners, with the previous years of secrecy and mystery finally starting to lift and advertisers pulling rank:
- Diageo pulled advertising from Snapchat, over age targeting problems in December. Read more on the Drum here >>
- Mars, Adidas and Lidl all pulled advertising from YouTube, over paedophilia fears. Read more here >>
- And Facebook continued its battle with Fake News, along with its impact on its seemingly increasingly unwieldy advertising business.
And what for 2018?
It's going to be 'more of the same' unfortunately (or fortunately) - depending on which side of the table you sit. Big is definitely going to be beautiful, and because of this we'll continue to see mergers happening at speed - along with casualties.
- Advertisers will continue to wrestle back power from media companies, with the bigger brands taking more buying in-house and doing more deals direct with media owners (a positive for media owners). This will be to the benefit of a small number of growth companies likes Beeswax - amongst others, who provide transparent tech to help scale media-buying by advertisers direct.
- The introduction of GDPR (on May 25th) across Europe will have a big impact on both advertisers and media owners, with the availability of data being restricted and no doubt putting the price of good data up and the quality of data generally down - with the winners being the consumers (which is probably a good thing).
- And broadly I’d predict it’s more of the same, with the big guys (GAFA) putting pressure on the rest of the media industry resulting in a splurge of M&A activity both in the media owner and adtech space. In particular I’d expect to see some high-profile adtech casualties, as adtech companies are undoubtedly shrinking in their value and proliferate in their numbers - meaning they’re being squeezed on all sides, in the same way as they had previously squeezed media owners. At the same time I think we'll see traditional media companies, ad tech and telco companies all converging and merging. Interesting times ahead . . .