TBI Tech & Analysis: Breaking down the numbers for 2019/20

2019 might seem like a different world to the Covid-19 dominated landscape we live in today, but the flurry of annual results revealed by US and European majors over recent weeks have provided an illuminating set of insights into how the content business is changing. Tim Westcott and Kia Ling Teoh, analysts at TBI sibling Omdia, break down five key findings.

The big get bigger

Combined revenues for the 10 US-based groups tracked in Channels & Programming Intelligence for this bi-annual report were $231.9bn in 2019, up 7% from $217bn reported in 2018. Mergers and acquisitions made a major impact. NBCUniversal (NBCU) added a full year of Sky’s revenues to reach $53.2bn in 2019, up from $35.8bn in 2018. Walt Disney Co increased its annual revenues to $76.3bn in calendar 2019, up from $59.4bn in 2018, acquiring most of 21st Century Fox and consolidating Hulu. ViacomCBS, with revenues of $27.8bn, and Fox Corporation with $11.8bn are new additions to the listing. Cable channel operators Discovery (up 5.6% year-on-year) and AMC Networks (3%) registered the strongest organic growth. Revenues for MGM Studios and Sony Pictures declined.

Subscription revenues beat ads

Combined advertising revenues for the groups tracked amounted to $50.7bn in 2019, up 3% from $49.4bn in 2018. With the addition of the 21st Century Fox networks, Disney overtook NBCU, reporting $11.5bn ad revenues. However, there was a difference of only a few million dollars, with a full year of Sky boosting NBCU. Both AMC and WarnerMedia reported a decline in ad revenues year-on-year. The picture for subscription revenues was better: a combined total of $75.5bn was up 13% on $66.6bn in 2018. NBC Universal’s revenues of $22bn (which includes the Sky platform) were ahead of Disney’s $17.4bn. WarnerMedia was next largest on $13.6bn. With $19.9bn in streaming revenue, Netflix would place second in this ranking. YouTube meanwhile reported $134.8bn in ad revenues, and Facebook $69.6bn.

Disney revenues extend lead over WarnerMedia

Content revenues include theatrical revenues, sale of home entertainment and TV rights, and revenues from production and other content, including games publishing. The 10 companies in our sample to report these metrics generated a combined $63bn in revenues in 2019, down 13% from $72.2bn the year before. Disney revenues from content were $18.6bn, up from $11.2bn the year before thanks to the addition of the 21st Fox film and TV studios. Warner Media was next in line, with $11.3bn, a total made up of the Warner Bros studio and content sales by Turner and HBO. NBC Universal was third with $11.3bn in 2019. Sony, MGM Studios and Lionsgate had the highest reliance on content sales last year, with ViacomCBS and NBCU at the other end of the scale.

Programming & production: Disney & NBCU spent over $20bn each in 2019

After absorbing the 21st Century Fox networks and Hulu, Walt Disney Co’s spending on programming and production has swelled to $24.8bn, ahead of the $20.5bn reported by NBC Universal with Sky included. ViacomCBS invested $11.1bn. WarnerMedia’s investment was $7.4bn. (These totals are for media networks only). US-based media groups occupy eight of the places in a Channels & Programming Intelligence top ten of 2019 programming expenditure. Behind Disney, NBC and AT&T (with DirectTV added to Warner Media) in our list is Netflix, which invested an estimated $10bn in programming last year, ahead of CBS and streaming rival Amazon. Japanese public broadcaster NHK and China’s Baidu, parent company of streaming site iQiyi, are the two non-US companies in the top ten.

Euro groups declines in ad revenue, eye diversification

Combined advertising revenues for the 11 European media groups tracked here were €16.7bn ($18.7bn) in 2019, a 5% decline from the $20.7bn generated in 2018. Only one group (France’s M6) reported a year-on-year increase in advertising revenues. Diversification has been a key target for most of these groups, with RTL Group and ITV both developing TV production as well as subscription video-on-demand services. Sky and NENT Group are the least dependent on advertising thanks to their ownership of pay TV platforms.

*Companies featured in this report include Amazon, AMC Networks, AT&T, Atresmedia, Comcast Corp (NBC Universal), Facebook, Fuji Media Holdings, ITV, Liberty Global, Lions Gate Entertainment Corporation, Mediaset, Mediaset España, Metropole Television (M6), Netflix Inc., Nordic Entertainment (NENT) Group, Nippon Television Holdings, ProSieben.Sat1 Media, RTL Group, Sony Corp, Television Francaise 1, Tokyo Broadcasting System Holdings, TV Asahi Corp, ViacomCBS, Walt Disney Co.

Tim Westcott is research manager for channels & programming at Omdia, while Kia Ling Teoh is a senior analyst of media and advertising for the research powerhouse. The full report, Channel Revenues and Programming Expenditure, provides analysis of media company results for full year 2019 to April 2020.

 

 

 

 

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