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Innovation10.31.14

What M&As And Rights Deals Mean For Your Favorite TV Shows

Next time you turn on your favorite television show, consider how much the industry has changed thanks to M&As and the Internet.

Television has gone through several evolutions this year as rights deals and acquisitions make big companies bigger, and give mid-market companies a channel to grow. In the last two weeks alone, AMC Networks Inc., the cable-TV home of “Mad Men,” acquired a 49.9 percent stake in BBC America for $200 million and HBO announced the launch of HBO Go, a standalone service that doesn’t require a paid subscription to cable.

It’s obvious what this means for players in the industry: more opportunities to broadcast on multiple channels to larger and larger audiences. In short: more revenue. But what could this mean for those playing along at home –and for their favorite shows?

For starters, it may just boost quality.

AMC has played host to award-winning dramas such as “Breaking Bad” and “Walking Dead” among others, while BBC America has offered viewers perennial favorite Dr. Who as well as new offerings such as “Orphan Black” a Canadian sci-fi thriller. Together AMC and BBC have collaborated most recently on a 7-part crime series “Top of the Lake” starring Mad Men’s Elisabeth Moss and Holly Hunter that garnered raves from critics and viewers alike.

The Guardian reported that Josh Sapan, chief executive of AMC Networks asserted, “A combined AMC Networks-BBC America channel group creates a powerful collection of networks that are among the most critically acclaimed, with distinct dramas and other potent content that creates a deep connection with viewers.”

Joining forces can bump up the resources needed to produce better programming, but listening to customers might just make it cheaper to watch it.

That’s due in part to the fact that Americans aren’t signing up to purchase cable subscriptions and many are canceling their existing service. Some are flocking to satellite services like Dish, which costs around $30 per month. Back in April, Dish finalized a multi-year distribution deal with Disney to offer its 14 million subscribers access to live broadcasts from ABC Family, Disney Channel and Disney XD as well as live network streams of ABC and programming from ESPN networks.

Also in March, AT&T agreed to buy satellite TV provider DirecTV for $48.5 billion, or $95 per share. Provided the deal goes through –it’s under FCC scrutiny– the merger gives the telecommunications company a potential combined audience base of about 26 million. Though DirecTV’s growth has slowed, AT&T outpaced other television providers,  although the company needs to be mindful that viewers continue to consume content online and need to incentivize them to come back to the tube.

It’s tricky to predict the future.

HBO meanwhile, is trying to put its own dent in competition from Netflix which has become a formidable player in the industry. Netflix streaming and DVD subscription brought in over $4 billion in 2013 and the service has successfully experimented with creating its own programming including “House of Cards.”

Until now, HBO and its parent company Time Warner have preferred to go the safe route and offer cable packages with add-ons for HBO programming to the tune of $10-$20 more per month, instead of streaming content online a la Netflix.

Some have speculated that companies such as Time Warner could make up for a potential revenue loss by charging Netflix and others such as Google or Amazon for faster access to consumers and cable companies –better known as the central point of a debate over network neutrality.

The National Cable & Telecommunications Association (NCTA) believes that if broadband providers such Comcast or Time Warner Cable started charging Netflix and others, “such a strategy almost certainly would be self-defeating, in light of the immediately hostile reaction of consumers to such conduct.”

Stay tuned…

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