h2 2020 | media talk
media talk | h2 2020
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LOOKING AHEAD TO 2021
On paper, the prospects for an M&A revival in 2021 look good. The pandemic has significantly accelerated remote working, ecommerce, digitisation and online entertainment, and the re-opening of economies should also lead to exciting comebacks for live entertainment and events management.
Investor trends could also make 2021 an interesting year ahead, especially in the rise of SPACs as funding vehicles. Though in the US, SPACs may eventually be limited by the lack of dedicated market and regulatory hurdles, the prospects for a number of European markets may be more immediate, meaning this could well be a space to watch. While the pandemic impacted different sectors of the media and entertainment industry very differently, the common denominator is change. Change in consumer behaviour, change in demand, change in platforms, and ongoing disruption will no doubt fuel deal activity across each sector in 2021. So though we may not expect a return to pre-COVID deal volumes just yet, there is every chance of a strongly resurgent – and hopefully less turbulent – 2021… Thanks for reading!
To the extent that consumer spending remains constrained in 2021, the amount spent on interactive and at-home entertainment is likely to continue to rise. Subsectors such as gaming and streaming content remain ones to watch as the big players fight to capture revenues by responding best to demand. While generally, media revenue growth may be slower through Q1, we anticipate recovery to speed up over the rest of the year, and there could well be a shorter path for M&A too. A new approach to antitrust and privacy regulation in the US could precipitate M&A activity, for example, as businesses look to re-organise to adapt to any statutorily enforced changes. In the US and elsewhere, the end of the year brought a resurgence in ad spending, which was a boost both to entertainment companies and the media agencies that develop and place ads. As advertising and marketing models continue to de- risk and add scale through digitisation, there is every sign of a busy year for ahead for deal flow and investment.
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