The Media practice of Value Partners has strong skills acquired over 15 years of experience in more than 40 countries.
We work in all areas of the digital market, with a focus on public and commercial broadcasting, pay-TV, publishing, new media and digital content, sports and betting & gaming.
We have worked for years on the theme of convergence and assist our clients in the sector who are committed to maximizing the impact and returns arising from digital media.
Among other projects, we have developed a digital media platform for one of the leading broadcasters; we have developed a strategy of convergent services for a major telecoms operator and we assisted Europe’s largest sports federation in the sale of the rights for mobile devices. We also provide advice on M&A, regulatory issues and in areas of operational improvement.
Value Partners’ Media practice has strong skills acquired over 15 years of experience in more than 40 countries. We work in all segments of the industry: publishing, public and commercial broadcasting, pay-TV, new media and digital content, sports and betting & gaming.
In particular, in recent years:
- We have assisted a major broadcaster in developing a digital media platform;
- We have partnered with several Telco operators to define the roadmap of convergent services (fixed + mobile + content);
- We have assisted several Market Regulatory Authorities to update the regulatory scenario with regard to media and OTT offers;
- We have helped professional clubs, sports federations and specialised companies in media rights management, in the development of new products and the enhancement of digital channels.
The publishing industry is facing overwhelming technological changes that undermine traditional operating models:
- On one side is the shift of readers towards digital tools, which erodes the revenue streams that have sustained the sector until very recently (advertising, selling paper and collectible products) and imposes a radical redesign of processes and cost structures;
- On the other there is the need to innovate the offer of content, to cope with competition from new players from the world of the web and social networks, to defend the customer/reader base and to identify new areas of growth.
Value Partners assists publishing professionals in both the realignment of structures and processes, and in assessing development opportunities, with particular reference to mobile publishing, online communities, user-generated content, integration between editorial content and interactive services.
NEW MEDIA AND DIGITAL CONTENT
The spread of smartphones and the increasingly intense use of the web has generated an enormous interest in “new media” and digital content in general. But this enthusiasm does not always lead to real business opportunities and even when the market potential is interesting, it is necessary to find the right formula to exploit it: content, models of offer, operative processes, skills, investment, times.
Value Partners helps its clients (consolidated companies that want to strengthen their presence in digital markets, or startups with ideas of innovative offer) to turn their insights into practical projects and to steer implementation. For these issues, we have served content providers, publishers and broadcasters in Europe, Asia and Latin America.
PUBLIC AND COMMERCIAL BROADCASTING
The value chain of the broadcasting industry – from production to editing, play-out to data storage, broadcasting and reception – is shifting rapidly from analog to digital. This transformation makes it possible to simplify enormously the creation, processing and distribution of broadcast media and enables new types of services: interactive programming and advertising, EPG, HD and 3D TV. It is these changes that are stimulating innovation in the pay-TV and FTA markets. Broadcasters focusing on the digital sector must necessarily redesign their operational model, invest in new technologies and adapt the approach to consumers. The power in the value chain is shifting gradually towards consumers, who are assuming more and more control of their media consumption, thanks to non-linear (time-shifting) TV and radio, and the portability of content, allowing them to watch or listen to what they want, when, where and how they want.
Value Partners helps its clients to respond to these changes so that they can maximise the value of their assets, implement agreements and partnerships with technological players and face the transition to the new distribution channels and new formats. Our clients include major television and radio broadcasters, networks and platforms operators, governments and regulators.
Many sporting events are considered premium content and are often crucial to the commercial success of media offerings. The owners of the rights seek to maximise the value of their assets, selling them to the highest bidders, but also creating new events, differentiating formats and also developing dedicated channels on TV and the web. On the other hand, those who buy the rights need to evaluate the market and their competitors to determine the actual value of the content in the face of increasingly high prices.
Value Partners has a long history of success in sports consultancy. In football, we have assisted national federations, European leagues and teams and have also worked on other sports such as tennis, motorcycling and running. We also work alongside broadcasters, fixed and mobile telecommunications companies, ISPs, B2B and B2C technology providers, sports rights owners and regulators.
The dynamics of the pay-TV sector have changed in the wake of the spread of new platforms allowing a growing ubiquity of video content, including terrestrial digital TV, video on demand (Hulu, Netflix, etc.) and hybrid broadband-broadcast offerings, such as Google TV, Apple TV and YouView in Britain. Consequently, the operators of pay-TV, which historically have relied above all on premium content to attract new customers, now have to justify their value through a wider range of distinctive features: the quality of vision (HD/3D), ‘view here only’ exclusive content and innovation in the offer of services (video on demand, improving the EPG and navigation instruments).
At Value Partners, we help our clients continue to be a reference point in a video ecosystem that is increasingly complex and fragmented. We support them in the acquisition strategies of rights and also for innovative initiatives in the selection of content and differentiation of the offer, including for example the redesign of modes of presence on social media and new distribution models.
Our clients include operators of pay-TV in Europe and Asia, regulators and other investors in the sector (operators, technology suppliers, etc.).
OTHER ENTERTAINMENT (BETTING & GAMING, ETC)
The global “betting & gaming” market is currently worth about $330 billion, with a CAGR of 6% over the past decade; in the next three year, this is expected to increase, albeit at a slower pace (4%).
North America remains the largest market, but major growth is expected from Asia and particularly China, Japan and Hong Kong. Online games, divided into sports betting and gaming is growing at a rate at least four times greater than that of the traditional business: today, it already accounts for 8% of total revenue, and is more common in more liberalised markets such as the UK.
Over time, online consumers have shifted from betting to games (poker, casino, bingo), but it is expected that sports betting will have a rapid impetus thanks to product innovation (eg. In-play).
Value Partners has extensive experience in the sector of pools, lotteries and similar and the gaming industry in general, where it has been active for several years with a focus on new products and channels. Our clients are the most important operators in the sector, sports organisations and supranational regulators.
Operation and empowerment
The recovery of flexibility in processes and the development of new distribution models is essential in a media world in which reign disintermediation and fragmentation and the way in which consumers follow and use the content changes rapidly, becoming more autonomous and interactive.
Value Partners works with leading broadcasters to help them adapt and rethink their role as aggregators and simultaneously assists start-ups to give shape to their business model.
Recent projects include: a strategy review for a broadcaster interested in seeing up an in-house production unit; advice to some broadcasters on managing relationships with ISPs connected to the use of internet in providing VoD services; the development of a framework to formulate a vision of the media market in 2020; user segmentation, to allow the customer to evaluate the effectiveness of the services offered; support for the evaluation of the content budget related to the launch of innovative services, with assessment of the business case and financial impact.
With the fragmentation of the markets, some of the existing rules to protect and guide competition can become redundant. At the same time, new rules and criteria for the definition of the reference markets become necessary. For example, the boundaries between telecommunications and media are becoming increasingly blurred, and the optimal use of scarce resources (eg. radio frequencies) is imported by new technologies.
Value Partners has assisted several Telco and Media regulators, governments and industry associations on issues relating to the liberalisation of the market and the development of competition. We are also called to give independent opinions on disputes concerning specific regulatory issues and assist the authorities in the planning and management of public consultations or tenders for the award of licences.
Some recent projects have concerned the market impact assessment (MIA) on TV, ISP and VoD markets with regard to the launch of internet connected television; assessment of the regulatory impact of rights to access and distribution of premium content on the competitiveness of the pay-TV market; the design of an overall economic model for the radio sector, evaluating the impact of the recession on the profitability and sustainability of the sector; a technical and economic evaluation of the characteristics and specifications for VoD over-the- top offers on TV; support in a tender for the allocation of new radio frequencies.
Development of the digital sector
The distribution of content across all platforms is the new strategic imperative, as readers and viewers demand content that can be accessed whenever and wherever they want through a variety of platforms. The integrated approach to digital media means that content be accessible on desktop computers, on home PCs, cellphones, music players and other instruments in addition to newspapers and television. In addition, the migration of the advertising revenues towards digital media has enabled an increasingly targeted audience profiling in the reference market.
Value Partners has assisted many media operators in the planning and development of digital strategies and in the implementation of change management required. The projects undertaken include: the digital strategy and diversification strategies for a television broadcaster; the formulation of an online strategy for a multinational television broadcaster; the identification of new digital business opportunities for a media services company; the development of mobile strategies for global media operators, including acquisition models and mobile customer management; the formulation of the analogue switch-off strategy (ASO) for some commercial broadcasters; the analysis of costs and benefits of the move to DAB technology and of the free distribution of DAB + radio devices to promote the adoption of digital radio.
The fragmentation and breaking up of content are reducing the traditional income of operators in the media industry, which, faced with this challenge, are obliged to identify new sources of revenue, innovating the offer, entering new markets and even charging the cost of content, initially funded by advertising, to readers. A recent example is The Independent in Britain, which launched a complementary daily, I, at a price of 20p (The Independent costs 1 pound), the target of which was the readers lost from the quality newspapers. The Times also charges readers to gain access to the site and some broadcasters are looking at the opportunities offered by micropayments, demanding the payment of small amounts for previews and other premium contributions.
Value Partners assists major media operators in identifying new revenue and market opportunities, promoting traditional assets to arrive quickly at a level of business sustainability. For example, we have dealt with the development of strategic diversification options for TV broadcasters; strategies for maximising revenue for a MUX DTT operator, realised through the cross-analysis of supply and demand; support to a media and telecom player in the decision to launch a pay-TV offer. And we have also assisted with the development of strategic guidelines aimed at revenue growth for an international media company and the identification, assessment and prioritisation of growth opportunities for media companies, in particular identifying the best go-to- market options.
M&A and integration strategies
The continuous search for opportunities for diversification of revenues continues to push M&A activity in the media sector, despite the difficulties at a macro-economic level. However, given the progressive reduction in multiples observed in recent transactions, the ability to assess the actual potential for value in a transaction will play a key role in making good deals. In our view, those companies able to combine purely financial expertise with traditional principles of corporate management (strategy, understanding of the sector, specific skills, organisation, governance, management of managerial succession, …), those that are more focused, and those that involve themselves more actively in the strategy and operations of their portfolio companies, will be the ones to reap the greatest rewards.
Value Partners operates alongside private equity firms to identify the most attractive targets and achieve maximum return on investment. For media companies, Value Partners applies the same target identification system and the same expertise of integration, together with a specific understanding of the media context.
In these years we have dealt with the preliminary analysis of targets for a television production company aiming to expand into new markets; the evaluation of the advertising concession for a television channel and due diligence of digital multiplexes, in particular assessing the expected evolution of demand and supply. We have also followed the evaluation of business prospects, supporting the refinancing of a television production and distribution company; the due diligence of a leading online affiliate network player and the commercial due diligence for a regional radio asset, including four FM and two AM stations.
Rights are the key value of the media industry. Their ownership and control are of fundamental importance, while the distribution over an increasing scale constitutes their main opportunity. Critical issues for operators instead concern the loss of content and piracy; the maintenance of a balance between the need for control and the need for an ever wider distribution; the construction of analytical models and tools that allow one to extract the maximum value from a progressively more fragmented distribution. Moreover, much of this activity needs to be carried out in collaboration with Hollywood studios and major producers. Ultimately, content providers agree that the management of rights is linked as much to the opportunity of developing new business models as to the ability to preserving returns from traditional ones.
Value Partners works with rights holders to identify new business opportunities, and the ways in which to make best use each time of the rights, at the same time protecting from piracy. We have dealt with the analysis of the process and the procedures of selling football rights; the assessment of the regulatory impact of public interest events on pay-TV operators, FTA broadcasters and owners of sports rights and a feasibility study of a micropayment system connected to an internet-connected TV platform for a consortium of rights owners.
IDEAS & MEDIA
An interview to Giorgio Rossi Cairo on the digital challenge
Alberto Calvo, Partner, wrote a contribution to Mind the change, by Alberto Baban, Armando Cirrincione and Alberto Mattiello. Edited by…
A new perspective devoted to the Pay-TV’s market and its operators’ struggle to differentiate themselves in a very competitive environment.…
An interview to Value Partners President Giorgio Rossi Cairo on Exage, the digital company he recently founded, that puts together…
How and why should SME set up e-commerce platforms in the UAE? An article by Alex Menghi, Engagement Manager of…
Xiaomi Inc, a smartphone maker, recently invested on iQiyi, a videostreaming platform backed by Baidu Inc. What is the purpose…
The opportunities offered by e-commerce in Western China. With a contribution by ChengFen (Jane) Hou, Partner.
A new perspective devoted to the benefits of the dynamic ticket pricing (DTP) in the sport industry. It is a…