The year ahead in media
There is only one certainty about the media in 2015 – it will be exciting and unpredictable and will come complete with more issues than you could shake a stick at.
One of the biggest issues in media this year could result from a further round of consolidation around Europe as phone companies get into bed with cable operators (and vice versa) and production companies – not already screwed to the floor – are snapped up by American predators.
A rational person might think that there might be a pause for breath after last year’s rash of deals which included Viacom’s purchase of Channel 5, Sky’s taking full control of Sky Italia and Sky Deutschland, Discovery’s All3Media deal and the creation of the Endemol Shine Group. Then there was AMC Network’s purchase of Cellomedia and a 49.9 per cent stake in BBC America etc…
Short of worldwide economic collapse and a dearth of targets the charge will continue for at least another year. When the roundabout starts running the music inevitably speeds up as those who missed out on previous deals try to clamber on board. Suddenly everyone simultaneously discovers the compelling wisdom of the quadruple play – TV, broadband and mobile and fixed telecommunications – and the merit of producers with intellectual property to sell.
It would be particularly wise to watch like a hawk the activities of John Malone’s Liberty Global and mobile group Vodafone.
Vodafone paid £6 billion to buy Spain’s ONO cable network last year but has vowed to spend at least £25 billion of its astonishing £84 billion windfall from the sale of its Verizon stake in the US.
Liberty Global, a company guided at all times by opportunism, spent £8.3 billion to buy the Dutch cable operator Ziggo.
Vodafone has denied it is interested in Liberty Global. But then they would say that wouldn’t they, as the late, lamented Mandy Rice Davies would have put it.
Mandy might also have had something to say about Liberty Global playing down its ambitions for its 6.4 per cent stake in ITV.
Why on earth would Liberty want to spend £481 million on a tiny stake in ITV other than to have a platform to judge the best moment to pounce, preferably after any takeover premium had begun to ooze away.
It is also likely that BT will spend the year building up its programme rights – primarily, but not entirely, in the sporting domain – once it has successfully returned to mobile through the £12.5 billion acquisition of EE.
You get the picture. It is rather difficult to ignore – the large beasts bestriding the communications jungle with their prolific cashflows – and that’s before even starting to consider what the newish players such as Facebook, Amazon, Google and Twitter might get up to if they chose to do so.
Now that Facebook founder Mark Zuckerberg has discovered that books really can be quite interesting, anything is possible.
The big match this year will, of course, be between BT and Sky over the next three years of live Premiership TV rights.
It is safe to predict that the current rights worth £1 billion a year should go at least to £1.3 billion. It is entirely possible that BT could emerge victorious, which in this case could mean a five packages to two win. A four-three win by anyone would be particularly bad news for viewers.
Total annihilation is, however, not possible under the rules of the game which stipulate that no player can control more than 126 of the 168 games on offer.
Apart from a powerful revenue stream and desire to protect its broadband business, BT has a useful advisor on hand in the shape of non-executive director Tony Ball, former chief executive of what was then BSkyB.
While Sky will undoubtedly benefit in the medium term from ownership of pay TV in both Germany and Italy the acquisitions have the smell of an each-way bet about them – if the worst should happen in the UK.
Then there is the small matter of Ofcom’s investigation of the way Premiership rights are sold, prompted by a Virgin Media complaint over the relatively small percentage of games on offer. More uncertainty to look forward to.
Whatever the outcome, Sky the company will survive. Its share price is already discounted to reflect the perils of a Premiership drubbing.
A tough year for the BBC?
Some of the most contentious and political issues of the year will swirl around the BBC – its funding and future structure and purpose, plus the findings of Dame Janet Smith’s Savile inquiry.
The Savile inquiry could turn out to be very embarrassing for the BBC – though not the present management incumbents.
Its reputation would still be damaged should it turn out that former senior managers, either dead or retired, in effect, turned a blind eye to Savile’s activities in the interests of keeping the talent happy.
Dame Janet is scarcely the sort of person to produce a whitewash.
As for the rest, the fate of the BBC rests entirely on the outcome of May’s general election. Every political party dislikes the BBC in its own particular way so there are no easy wins for the Corporation.
The least bad outcome would probably be the most likely result – no party with an overall majority and the outbreak of intense horse trading involving no less than five minority parties – the Scots Nats, Lib Dems, UKIP, the Greens and the various shades of Ulster unionism.
On current opinion polls the largest of the five, and therefore the most powerful, will be the Scots Nats who will probably blame the media, and the BBC in particular, for their referendum defeat.
If there is a genuine political mess then second tier issues such as the future of the BBC and totally daft policies like the high speed railway HS2 might have to give way to crises in the NHS and the economy.
That, for the BBC, would probably be as good as it gets.
The biggest issue for the media in 2015 will undoubtedly be the one that no-one has predicted, that comes out of the blue with unpredictable consequences.
Bring it on.
Raymond will be speaking at MediaTel’s invite-only Year Ahead event on 14 January, alongside fellow media journalist Torin Douglas and Starcom MediaVest Group’s CEO, Pippa Glucklich.
Further details available on the MediaTel events website.