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Consolidation will rule video services in 2022.
The several-year trend of video cord-cutting in favor of online video services continues: 25% of internet households expressed an intention to terminate their cable or satellite subscriptions and move to an online TV provider. This has resulted in an incredible fragmented video services market with hundreds of online streaming services available in the US alone. Streaming media companies profit from having greater scale, and one strategy used by traditional media companies to compete in the streaming environment is to acquire current services. Consolidation in the entertainment and television sectors will be fueled by the desire of media conglomerates to diversify their revenue streams beyond traditional pay television. Major M&A and service consolidations in 2021 included NBCUniversal’s merger of the WWE Network with Peacock, Funimation’s acquisition of anime competitor Cruynchyroll, and Blackstone’s $3B acquisition of Moonbug Entertainment. In 2022, the SVOD industry will likely consolidate further, resulting in a wave of high-profile mergers, partnerships, and acquisitions.
Eric Sorenson Sr. Contributing Analyst Parks Associates
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