This week IBC2024 begins, the 57th annual event draws together the global media, entertainment and technology industry to gain insight and unlock business opportunities. This blog considers key themes in entertainment and broadcasting to critically evaluate what global investors and shareholders seek from the sector. The event is set to cover insight into AdTech, AI, Cloud, Connected Technologies, Immersive Technologies and OTT (Over-the-top (OTT) — The method of streaming content “over the top” of the internet across any device.) & Streaming.
AdTech businesses such as Moloco enhance engagement and revenues in the digital landscape of broadcasting. Programmatic advertising has atomized buying and selling ad space and uses data to effectively target specific audiences, leading to higher engagement and better ROI for advertisers. The personalised output of AdTech makes adverts feel less intrusive and more relevant to us as viewers which increases conversion rates.
AdTech business valuations are benefiting from high multiples where they deliver innovation and differentiation, scalability and data monetization. Only those which deliver strategic partnerships with other tech companies, agencies and publishers to expand reach and capabilities, all whilst monitoring compliance and trust with clients and users, achieve the highest valuations. Standalone businesses have a high-risk status which reduces investor appetite, hence a wide range of multiples [7-10x EBITDA].
Deal Highlight: Supponor – LBO by TGI Sport via financial sponsors – £84.97m of debt raised
Supponer operates as an innovative sports and media tech company that converts the signage that a TV viewer sees depending on location etc. The company virtually enhances the advertising space in a live broadcast and enables business to maximise the value of broadcasting large events through the virtual advertising sector. The acquisition highlights the demand for modern advertising across diverse sectors such as the following.
AI is changing the broadcasting landscape, just as it is shaping all other sectors. The IBC event is showcasing generative AI in action and demonstrating to broadcasters how AI can produce fast moving, disruptive media that utilises audience validation through audience interaction. Value will be attributed to businesses fast at utilising XR (extended reality), voice, AI & HTML-Based Graphics Solutions. As well as the traditional methods of AI utilisation such as machine learning, predictive analysis, and deep learning.
We increasingly recommend clients adopt AI to streamline and advance workflows. Similarly, AI is expected to enhance content creation (although our clients have yet to make this work in, say, animation production), generating news reports, sports highlights and scrips, which will help broadcasters to produce more content at a faster rate. It will help content management to streamline workflows by automating tasks such as video editing, tagging and archiving – reducing the time and effort required for these processes and boosting productivity.
Consumer relationships can develop as personalised experiences become the mainstream and increase engagement and satisfaction. Quality control can also be advanced to ensure broadcasts meet high stands which includes tasks like detecting and correcting errors in live broadcasting.
Highlighted Business: AudioShake
Jun 2024 – Early Stage VC – Funded by Five Two Five – £3.61m raised
US operator of music stems creation platform intended for artists to make money from their music. The platform separates recordings into separate parts, opening new streams for monetization and creative uses, also making music more interactive, immersive and accessible. B2B SaaS model provides recurring income streams from industry leaders as it negotiates time saving with multiple content workflows.
Highlighted Business: Vinolabs
$8.4m Raised to date
Swedish platform that uses a series of AI engines that use multi-layer scene by scene content analysis and data sources to enable a recommendation engine that creates an accurate personal viewing experience. Data is crucial for the media business to make better decisions throughout video production, acquisition and distribution, the b2b SaaS model will enhance the value of all users’ businesses, whilst we expect to find competition within the sector, we also expect to see larger players purchasing the IP of data analysis models at high premiums.
Cloud tech is crucial for flexibility and innovation, but with it comes the need for secure storage and on-demand resource access. Broadcasters increasing look to the cloud to deliver a content to the viewer. Additionally, as the upload speeds improve the cloud is facilitating remote production processes, allowing for different line items to be developed without being on the same location or physically transferring assets. Commentators have been singing the praises of a multi-cloud option for broadcasters offering the opportunity for diversity and optimisation.
Scalability is crucial to broadcasting, particularly over live events, cloud technology increase value to a broadcasting house by allowing movement in operations based on demand. This means that they can handle peak times without investing in permanent infrastructure. The shift from CapEx to OpEx reduces investment costs, as in-house physical hardware becomes obsolete, instead cloud services allow for pay-as-you go models.
The cloud supports rapid innovation by providing access to the latest technologies and tools. This has allowed broadcasters to experiment with new formats without the significant upfront investment. Leveraging the cloud improves overall operational efficiency whilst also enhancing a viewer’s experience. We expect to see a full cloud-based transition from the sector within the next few years, with premiums on those businesses that create their own cloud-based solutions, increase operation efficiency whilst experimenting with the new forms of media available to them, increasing viewership.
IoT, 5G and smart devices will be able to create a unified media ecosystem. The topic explores potential for new content consumption and interactive audience experiences – offering the opportunity for redefined broadcasting. Businesses that have begun to explore opportunities to redefine media will uncover the value placed on innovation.
Broadcasters will be searching for increased and diverse streams of revenue from evolving technologies, and with innovation and brand differentiation, a competitive advantage will develop. SaaS based models will increase the value of a business, whilst potential investors or acquiring parties will also be looking to how data is utilised and the potential scalability of operations.
Giants of British broadcasting have adapted to use a connected technology model, Sky advocates the need for the UK to power the technology driven creative industries, with a particular focused towards innovation. Businesses such as Sky and BBC have their own innovation development teams, but also outsource and acquire when the right opportunities arise.
Immersive Technology encompasses VR, AR and MR and is a new opportunity for storytelling, and viewer engagement. Immersive content experiences operate from live events to narrative story telling. Premiums will be placed on businesses that can turn these experiences from fad to mainstream. Market differentiation appeals to younger audiences who are drawn to immersive and interactive content, businesses which cater to this demand are expected to capture a significant market share.
Deal Highlight: Landvault – acquired by Infinite Reality – $450m
The first UK based corporate deal this year within the immersive space, Landvault works to create metaverse experiences that utilise AI-powered building. The business creates, publishes, monetizes and tokenizes immersive experiences and digital twins. Use cases include:
– Marketing
– Events
– Real Estate
– Urban Development
– Web3
– Financial services
We expect to see ongoing investor appetite for competitive immersive technology across PE and trade buyers, with premiums paid to those who offer whole suite solutions such as Landvault. As data continues increase in value, businesses that leverage and monetize their data will see increased valuations from global players.
Streaming has transformed content consumption and allowed media to be accessed anywhere at any time. This year the IBC are looking to highlight how platforms are revolutionising content access and viewer experiences.
Businesses that produce enhanced user experiences with seamless integration will receive higher value multiples from interested parties as viewer satisfaction remains key in ensuring viewers continue to return to streaming platforms. The same can be said for those that decrease latency and increase seamless streaming opportunities.
Deal Highlight: S&MI – acquired by Lottery.com – £1m
Provider of news publishing service focused on sports coverage and highlights. The business sold to lottery.com in an aim to expand its digital entertainment and sports engagement footprint.
To Conclude
Innovation – that is where this year’s IBC is stating value is derived from. At Polestar we enable shareholders to realise value in their innovation, we are excited to hear in more detail how the broadcasting industry is set to demonstrate its ongoing commitment to innovation and regeneration.
If you are a broadcasting, production or adjacent business, we would love to hear from you to help you and your shareholders achieve value in the media sector. If you are looking to raise capital, make an acquisition or think you are ready to sell why not join Eddystone.Club, a club for founders and business owners similar to you.
