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What's going on?
Multi-Channel Networks (MCNs), like Wonderly and Rooster Teeth, produce videos that get distributed via different channels like YouTube and Facebook; they are now seriously competing with traditional media companies. Investments in these MCNs tripled from 2013 to 2014 (to $1.65bn) - and there have already been a slew of major deals in 2015.What does this mean?
It means trouble for traditional media companies like CBS, Disney and the UKs ITV (to name just a few examples). These companies make their money from advertising, but as viewers desert TV for online media channels, advertisers follow suit. So traditional media companies are now investing in, or just buying, the distributors of online content for example, Disneys recent acquisition of Maker Studios.Why should I care?
- Media stocks have had a terrible summer and this might not improve in the near term. Streaming services and online channels are proving to be hugely disruptive, and it will take time before the survivors emerge Disney does look like its being one of the most proactive.
- Stocks of online media companies such as YouTube (owned by Google) and Facebook should continue to benefit from increased advertising revenue.
Originally posted as part of the Finimize daily email.
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