Demand for content and bandwidth in the entertainment,...
Demand for content and bandwidth in the entertainment, media and communications industries will spur increased mergers and acquisitions and divestitures in 2013, said PricewaterhouseCoopers in a report released Tuesday (http://pwc.to/15Eev18). “In an increasingly saturated U.S. market with limited spectrum options,…
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operators are taking the M&A route to garner additional spectrum, geographical coverage, subscribers and more robust product and service portfolios.” PwC also said the demand for content will spur companies to look overseas, creating more international investment in the industry. To participate in all the deal making, PwC said companies will also be looking to free up cash through divestitures, a scenario it said will be “especially prevalent” among publishing companies that have been impacted by the increasing shift to digital content. The report forecast technology companies will continue to invest in media and communications, “blurring the lines” between the two industries. PricewaterhouseCoopers said entertainment, media and communications M&A in Q4 “reached the highest level since the first quarter of 2011” and are expected to remain “robust.” The report said broadcasting deals increased from $2.7 billion in 2011 to $5.8 billion in 2012, and cable deal value went from $3.4 million in 2011 to $9.1 million in 2012. PwC said cable companies will continue to “monetize the shift toward increased digital consumption, grow their subscriber base and improve operational efficiencies in 2013.” According to the report, communications industry deals increased from $26.9 billion in 2011 to $43.5 billion in 2012, and PwC “expects this sub-sector to remain active as communications companies seek to increase bandwidth and expand service offerings."