Streaming Media Mergers and Acquisitions in 2019
How the Streaming Landscape Changed in the Runup to 2020
While it may be hard to imagine — especially during this time when COVID-19 brings a delay in tax filings, tax collection, and business uncertainty — just a few months ago, the streaming industry celebrated the launch of several iconic streaming services.
Over the past few years, I’ve covered the prior year’s mergers and acquisitions in a Streaming Media Sourcebook article called Streamticker. While Streamticker wasn’t part of this year’s 2020 Sourcebook, I’m going recap a number of key 2019 mergers, market activity, and acquisitions below.
OTT Comes of Age, Disney Style
Before we head into acquisitions and mergers, let’s think back to the end of 2019 and just how greatly the over-the-top (OTT) market changed. While 2019 started with what we’ll call the “Big Three” OTT services (Amazon Prime, Hulu, Netflix), by the end of 2019 we saw launches from major consumer lifestyle device( Apple and its Apple TV+ service) and entertainment (Disney with its Disney+ service).
The Disney move into OTT, just prior to CEO Bob Iger stepping down, culminated two years of acquisitions on both the technology and content fronts. Not only did it bring together content from the Marvel, Star Wars, and Fox Studios libraries, but it also leveraged a 2018 acquisition of BAMtech, which had made a name for itself in the streaming space for live-event delivery.
On the delivery front, it’s worth noting that Walt Disney also acquired Star Companies in India, which owned the OTT platform Hotstar. The merger now allows Hotstar to launch Disney+Hotstar to bring Disney, Pixar, Marvel, Star Wars, and National Geographic content to the Indian subcontinent’s 1.2 billion people, many of which consume long-form OTT content on mobile devices.
Viacom and CBS Merger
On the entertainment side, one of the biggest mergers of the year occurred in August 2019. While it involved no cash exchanging hands, but rather a significant stock swap, the merger of Viacom and CBS into ViacomCBS followed years of infighting between both companies, both of which are owned by Sumner Redstone and his National Amusements firm.
Over the past few years, Sumner’s daughter Shari Redstone has pushed for the merger in her role as vice chairman for both Viacom and CBS. While the CBS shareholders ended up with 60% ownership in the new company, it is Bob Bakish, Viacom’s CEO, who runs the new company and its focus towards online media distribution.
Viacom itself had acquired Pluto TV back in early 2019 for the sum of $340 million, so the ViacomCBS merger brought not only traditional CBS content online (as part of CBS All Access) but also fifteen other online media properties that will be part of the VIacomCBS offering.
Brightcove and Ooyala
By the time you read this blog post, another acquisition from early 2019 will be shuttered. Brightcove announce in February 2019 that it was buying the entirety of Ooyala’s Backlot online video platform (OVP) for the fire sale price of $15 million, of which $6.25 million was cash and the remainder was Brightcove shares. The “fire sale” term comes from the fact that Ooyala had been jettisoned from Telstra in 2018 after Telstra took a total write-down of its $331 million it had spent on Ooyala over the years.
Apparently Brightcove, itself an OVP, hasn’t been able to leverage the Ooyala OVP either, and announced in August 2019 — five months after it acquired the Ooyala OVP — that it was ending support for the Ooyala portion by April 1, 2020. Customers were unnerved, as some of them had received assurances that Brightcove would continue support for up to 18 months after the acquisition, but with Brightcove saying at the time of acquisition that it was going to merge the best of both the Brightcove and Ooyala platforms together, it’s possible that Brightcove found itself ahead of schedule for the technical aspects of the merged platforms.
Brightcove also acquired the oddly named TV App Agency around the same time it announced the end-of-life timeframe for the Ooyala OVP. The functionality of this new acquisition found its way into Brightcove Beacon, which has both a content management system (CMS) and an application generator for rapid app development.
Thoma Bravo Acquisition of Instructure
In the education space, there was a major go-private merger underway at the end of 2019 that came to fruition in early 2020.
Instructure, Inc., the company behind the learning management system (LMS) Canvas, was listed on the New York Stock Exchange under the ticker symbol INST. Instructure announced in December 2019 that it planned to merge with private equity firm Thoma Bravo, which offered shareholders $47.60 in cash per share.
While the per-share price was ultimately raised to $49.00 per share, and INST was removed from the NYSE, the move by Thoma Bravo to take over Instructure isn’t the first time Thoma Bravo has done this with a company in the streaming media space. It owned Telestream for four years, during which time it pushed emphasis of Wirecast, acquired by Telestream from Vara Software.
In a similar way, Instructure had Arc Media, which was focused towards offering media creation tools for any education-focused LMS — including those LMS systems that also compete with Canvas. But with the go-private effort with Thoma Bravo, there’s been a rebranding of Arc to call it Canvas Studio.
Weathering the Landscape in 2020
There were a number of other mergers and acquisitions in 2019, but the short list we’ve presented here may be able to not just weather the current stay-at-home situation across the globe in March and April 2020, but perhaps even thrive as more and more customers focus their attention towards online video as a way to pass the time waiting for the lockdowns to end.