The games industry, with the potential to become the world’s largest media and entertainment sector by revenue, is undergoing profound transformation.
The consolidation of major developers is a response to a revenue model pivoting toward subscription, with direct consequences for those already in the subscription space: film, TV and music.
A technology-led creative medium, with an audience approaching three billion gamers, is seeing its franchises become more valuable and useful than ever.
UK news publishers have rushed to distribute content on TikTok. They are drawn by its enormous young audience, but poor monetisation and data sharing, a lack of referrals to their own sites, and data security concerns are frustrating a full embrace of the platform.
TikTok is increasingly identified as a ‘news source’ by young people: a risk to publishers distributing content on the platform is that their brands may get lost in user feeds.
Publishers should view activity on TikTok as a strategic cost instead of a revenue source: an investment in brand awareness, and development in content and delivery formats that are becoming more widespread across platforms. Brand visibility is key to success here.
Sky has extended its Italian Champions League coverage to 2027, most of it to become exclusive, but at a higher price.
Amazon keeps its Wednesday first-pick
Having secured the UEFA rights, Sky has derisked the upcoming Serie A auction for seasons from 2024/25.
The Italian deal highlights the rebalancing of media rights value from domestic leagues to European competitions.
Microsoft’s planned acquisition of Activision Blizzard is in trouble. US, UK, and European regulators may make the deal impossible for Microsoft—and a disaster for Activision and the wider industry.
Sony’s late improvement in PlayStation 5 sales is only just enough to reach its target numbers for the year. It needs a more dynamic approach to a rapidly changing industry, and a less dogmatic message to consumers and regulators.
Netflix Games is more than a trial—it’s on track to become a major games platform.
In a transformative upgrade of its content subscription offering, Google is buying the rights to live Sunday NFL games for $2 billion per year for 2023-2031.
YouTube can leverage its massive reach to challenge existing video aggregators, including pay-TV platforms and Amazon, as a gatekeeper to consumers.
Google will likely deploy a similar strategy in Europe, eventually competing with Sky, Canal+ and other incumbents—a hopeful development for football leagues.
After China updated its Anti-Monopoly Law to cover platform companies, the Government is bringing to heel privately owned ‘national champions’, including via antitrust measures in their home market—the key source of their astronomical cash flow—and through interference in their expansion outside China
China lacks any tradition of anti-monopoly activity, given its gradual shift to the market from state-owned enterprises, it offers an example of theory in practice for antitrust reformers targeting platforms in the West
The global implications are huge: up to $2 trillion of Wall Street shares are exposed as China tightens controls on foreign IPOs. Regulators could also use enhanced antitrust powers to disrupt global dealmaking for economic leverage
The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.
Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.
The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.
After a strong post-pandemic rebound, Sky has the opportunity to leverage its strong reputation with consumers to meet the challenge posed by new competitors and the studios’ direct-to-consumer transition, establishing Sky Q as the ultimate gatekeeper of video subscription homes.
Sports rights costs in Germany and Italy have been cut significantly, while Sky’s spend on UK Premier League rights will decrease in real terms. Savings will ease the financing of the shift to original content, which, associated with owner Comcast’s NBCU output, anchors the aggregation strategy.
Fibre deployment in the UK and Italy presents a subscriber and revenue growth opportunity, and underpins the gradual shift away from satellite to online content distribution.
Advertising income has been the lifeblood of commercial TV for decades, but declining linear audiences—combined with digital video alternatives—mean the TV advertising model must evolve to ensure it remains as potent a medium for brands as ever.
Lack of effective audience measurement and somewhat opaque advertiser/agency/sales house relationships are hampering linear TV advertising revenues. Both issues need resolving to underpin a healthier ecosystem overall.
Flexibility is key to this evolution. A move to audience buys across most linear and BVOD inventory would provide greater flexibility and targeting for advertisers, and would sit alongside some premium context buys. A greater onus on volume deals would give broadcasters more certainty to invest in content and their advertising propositions.
The games industry enjoyed a robust 2020, with the pandemic creating high demand across titles and platforms. Now a core part of the mainstream media and entertainment ecosystem, games share of entertainment spend and audience viewing time will maintain momentum and increase in 2021.
The demand for, and value of, premium content has migrated to game IP, with top franchises driving increased M&A activity and tighter integration with film and TV output, and providing an important advertising channel.
The pandemic has provided breathing space for the industry on regulatory scrutiny of revenue models, and overall consumer safety. Regulators need to increase their speed in 2021, and act decisively on predatory ‘free-to-play’ game mechanisms.