Due to continuing structural changes in the entertainment/media industries content providers will set the pace for a banner year in mergers and acquisitions - that's according to KPMG, the global accounting and business consultancy. And I agree!
M&A activity between entertainment driven companies and internet/tech companies is the next logical step in the evolution of content creation and distribution.
David Elms, Head of M&A at KPMG says, "There is now a pent-up demand for M&A activity in this sector which is likely to trigger more and bigger deals in 2014. The pace of change across all media is now so rapid that many businesses cannot adapt through a natural process of evolution. Creating a market-leading position organically is becoming almost impossible."
CMG has taken the view, over many years now, that the large tech/internet firms such as Amazon, Apple, Google, Netflix, etc. would need first-rate content to fulfill their need to expand into the entertainment field in a big way. That growth, for these tech firms, would either come internally (which is on-going) or through acquiring content providers such as the large Hollywood studios. And they certainly have the money to do just that.
Elms further stated, "Many of the tech companies are moving from offering 'secondary' content - movies and TV shows which have previously been exhibited or broadcasted - to offering 'primary' content to secure a competitive advantage. This will result in these companies acquiring producers of content. This type of content focused convergence is driven by a desire to create sophisticated audiences, and technology is making this an increasingly achievable ambition." We could not have said it better David.
In a related story, last week, Disney Studios appointed tech guru Jack Dorsey to its Board of Directors. Yes, that Jack Dorsey, the former prime mover at Google, and founder of social-media company Twitter and online payments start-up Square. Dorsey will join other tech-centric Disney Board members Sheryl Sandberg of Facebook and John Chen of BlackBerry.
Disney has been termed, "the faster-forward old media giant" vs. others in the Hollywood studios' club, but Bob Iger, Disney's CEO knows the writing is in the wall regarding the tech giants move into entertainment media. Iger was interviewed by Kara Swisher, our friend at Re/Code, an internet media company. Excerpts from that interview are in the next section of this CMG post.
Re/Code Talks to Disney's Iger
You have added high-profile Silicon Valley people to Disney's Board, why?Iger: These are people that created or helped to create businesses that are incredibly disruptive, ones that change the order of the world. We need a disruptor's perspective. Our world is changing, it's hard in a big media company to have that perspective we need that wisdom at Disney.
Steve Job was on Disney's Board did he change Disney?
Iger: Yes, he came with the Pixar acquisition and I sit on the Apple Board. We were obviously influenced by his demand for excellence. Steve was very forward-thinking, especially about the emergence of the smart mobile devices.
The tech space is a lot about trial and error and that is something Disney needed to understand - that we should not give up when something did not work.
How did you pick Dorsey?
Iger: I and other Board members all agreed that he has a totally new perspective and one that Disney must have about sharing information.
How hard is it for a big media company, like Disney, not to be scared of the tech giants?
Iger: Well, it was a process that took place over time. We had to understand that businesses are challenged left and right and if we did not get on board and challenge ourselves, we were going to get swept away.
Golden Globes Blasts Oscars
The Hollywood Foreign Press Association, which sponsors the Golden Globe Awards warned the movie studios to cease and desist in using the term 'winner' in describing a movie's nomination for a Globe award.
The HFPA, in a letter to the major studios, warned, "We have recently seen several instances in which the word 'winner' was used too prominently in publicity and advertising to describe nominees. While earning a Golden Globe nomination is certainly a honor, it is not a 'win', and using that term is likely to mislead the public and diminish the excitement around the Golden Globe award show."
Promotional ads for a number of Oscar contenders have used this tactic in large text above the number of Golden Globe nominations received. The promoters of the films '12 Years A Slave', 'Osage County', 'Philomena', and 'Long Walk to Freedom' were named the major offenders - three of these being, you guessed it, Weinstein Company products.
It should be noted that this tactic, used to generate Oscar buzz about a film, is ban by the Academy of Motion Picture Arts and Sciences.
Jim Lavorato
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