Marketers, Gear Up for a Changing 2020s Media Industry

Unlike the past decade, the media industry over the next 10 years won’t be characterized by major mergers and acquisitions.

So predicts industry expert Aryeh Bourkoff.

Speaking to Benjamin Mullin from the Wall Street JournalOpens a new window , Bourkoff, founder and CEO of LionTree, a global investment and merchant banking firm focused on media, technology and telecommunications, warns that the next decade will see big media companies including Disney, Netflix and AT&T focus on developing their direct-to-consumer offerings and look to other tactics that won’t necessarily rely on huge deals.

According to Bourkoff, while “the last decade has been characterized by frenetic [mergers and acquisitions] to reach scaled platforms…that mountain has been climbed. Now, we are going to be level-setting into 2020 and over the next decade, when we’ll have a slowdown of that trend.”

On its surface, this industry forecast shouldn’t have a significant, direct influence on the marketing sector. However, the impact it has on the media environment, I believe, will no doubt spill over to marketing strategies across the board.

On-demand and direct-to-consumer

It’s safe to say that media’s biggest players now understand the behemoth that is the on-demand streaming market. Indeed, many have been moving to consolidate their market share and build their direct-to-consumer capabilities. Some of the major deals in recent years, Bourkoff says, are noteworthy as companies seek “bigger content libraries to draw on” and “larger audiences to sell advertising to.”

After investing more than $2.5 billion for a majority stake in streaming technology specialist BAMTech in 2017, Disney this year acquired most of 21st Century Fox for more than $71 billion. AT&T bought Time Warner for some $85 billion, also earlier this year, while Discovery acquired Scripps Networks Interactive. And don’t forget Altice USA’s purchase of video-streaming start-up Cheddar for around $200 million.

Then there are the mergers. Viacom and Sister company CBS combined this year to create a $30 billion conglomerate. Similarly, New York Media and Vox Media also came together months later in an all-stock deal.

What does this all mean? Bourkoff says these “deals have stacked the deck in favor of the biggest companies.” He points out that their newly improved ability to scale means they will enjoy better financial terms and conditions than their smaller competitors.

One of the industry shifts that is clear from all the mergers and acquisitions is that the streaming wars are well and truly upon usOpens a new window . And marketers should be ready.

As my colleague Ethan Schrieberg explains, “what makes these streaming platforms so attractive to consumers — the on-demand access to the programs they want coupled with the customizable nature of these services that allow users to shape a more personal experience — can be equally valuable to advertisers.”

Targeting audiences at a granular level should be easy as the systems running these video-on-demand services shelter a treasure trove of individual user data that can be used to derive insights about media consumption preferences and behaviors.

Cross-channel will become critical

A truly unified buyer experience in the digital age is cross-channel.

Yet, designing cross-channel and personalized marketing isn’t easy. Despite all the available adtech and martech, the ability to deliver such a campaign requires substantial investment of time and budget. Even then, you might not get it right.

That activity may well change in the next decade.

Bourkoff believes that although deal activity will slow down, there will still be plenty of moves made. For instance, he says that some of the biggest media conglomerates could look for opportunities to cut deals with organizations in adjacent industries such as audio streaming or gaming as they seek subscribers through new avenues, much as did Amazon with its 2017 purchase of Whole Foods.

In other words, we can expect media companies to search for ways to offer their video-subscription audiences more than just video.

“Once you hold the consumer’s attention in the form of a subscription service, in order to maintain that consumer engagement and also maintain pricing power around that consumer, a more innovative, diverse set of offerings will be required than just straight video,” says Bourkoff.

That’s a big deal for marketers. It means we’ll need to get more comfortable with a cross-channel approach and find media partners whose business footprint across entities can support our specific ambitions.

So my end-of-decade, start-of-decade prediction: It won’t be long before cross-channel goes from a marketing nice-to-have to a must-have.