MGM watch: Will studio be affected by media consolidation?

MGM logo

AT&T Inc.’s pending $85 billion acquisition of Time Warner may kick off a new wave of media consolidations, analysts told Reuters.

So where does that leave Metro-Goldwyn-Mayer, a small fry on the media landscape?

MGM, the home studio of the 007 film series, emerged from bankruptcy in 2010 as a small company. It’s unable to release its own movies and has to cut deals with other studios. It’s also more of a television production company, making shows for cable networks.

Many bigger studios are already parts of conglomerates, including Warner Bros. (Time Warner), Columbia (Sony Corp.), Paramount (Viacom), Universal (Comcast), etc., etc., etc.

With AT&T’s announced purchase of Time Warner, still subject to regulatory review, even more consolidation is expected. Here’s an excerpt of the Reuters story by David Shepardson and Jessica Toonkel:

Media content companies are having an increasingly difficult time as standalone entities, creating an opportunity for telecom, satellite and cable providers to make acquisitions, analysts say.

Media firms face pressure to access distribution as more younger viewers cut their cable cords and watch their favorite shows on mobile devices. Distribution companies, meanwhile, see acquiring content as a way to diversify revenue.

“The industry needs to consolidate,” said Salvatore Muoio, whose firm invests in a number of media companies, including Time Warner. “You have a lot more competition from the likes of Netflix, Amazon and Hulu.”

“Media content companies” include movie and TV studios.

There’s no telling how this will turn out. AT&T doesn’t expect the Time Warner acquisition to be completed until the end of 2017. Also, the purchase is going to be carefully examined by U.S. regulators.

It’s just worth noting the media business is going through new uncertainty. The Bond film series is tied to a small player in MGM. It may be worth watching how the consolidation unfolds.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: