2017’s Key Trends

As we celebrate the year we’ve had – we thought it was a good time to reflect on some of 2017’s key trends in the media and technology industries:

1. Acquisitions take an IP-turn

While the media world is currently digesting the eye-watering $66bn deal Disney paid for Fox’s entertainment assets and some debt, there were some other notable acquisitions in 2017 that we’d like to highlight. Netflix, for example, made their first ever acquisition, of indie comic book publisher Millarworld, to secure the rights of some of Millarworld’s most popular works including Captain America: Civil War and Logan and leverage these on its platform.

Similarly Google’s acqui-hire of Huawei was a clear ploy to stockpile talent and IP as Google develops its Pixel smartphone. Likewise, the recent Apple takeover of Shazam can be regarded as a grab for its sophisticated automated content recognition (ACR) software. These deals, although in the shadow of the giant Disney/Fox agreement, demonstrate the ongoing trend of acquiring the IP of a company – arguably the most important business asset.

2. Artificial Intelligence… without the bodies

Nowhere was the market hotter than in artificial intelligence (AI). In 2017, there were almost $24bn worth of mergers and acquisitions activity related to artificial intelligence, up from approximately $5bn in 2015. 2017 was the year of home assistants, underpinned by AI, established themselves in our homes through Amazon’s Echo; Google’s DeepMind defeated the world champion in “Go”, an ancient and innately human game, and every start-up from London to Timbuktu seemingly used artificial intelligence (or rather machine learning, an application of AI where machines learn to solve a problem themselves) in its offering.

However, the most frenzied rush, notes the Economist, is for human talent , which is far scarcer than either data or computing power: there are twice as many jobs for artificial intelligence as applicants. Tech companies are plundering academic research departments for new talent, resulting in consolidation of AI in a few tech giants.

3. Content remains king… but its Crown is online

One area artificial intelligence is unlikely to dominate just yet is the creation of content – although a jarring AI produced sci-fi script premiered at the sci-fi London film festival last year. Instead, human beings continue to rely on other human beings for detailed storytelling, thematic depth and subtle characterisation – and will pay a lot of money for it. 2017 saw Netflix spend $6bn on content, comments Fortune, with its crown jewel being either Stranger Things… or The Crown (depending on which side of the Atlantic and in which decade your loyalties lie). Among the other new-ish market entrants, Amazon spent $4.5bn and Hulu $2.5bn – far outstripping the $2bn spent by television juggernaut HBO.

What does this say about media market spending? Namely that the balance of power, in terms of spend at least, is shifting towards online streaming. No-one realised this shift more than Rupert Murdoch, notes the Guardian. Through selling his entertainment assets, he is pivoting away from investing in traditional pay-TV market, and doubling down on his first love: news. But the battle of content goes on. And while, the new video streaming services may have spent heavily, they are now up against an even stronger media giant –Disney – that has now added flagship content brands, such as Avatar, The Titanic and The Simpsons, to its growing ranks. It’s going to be an interesting 2018, and these three trends are something we’ll be keeping our eyes on.

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If you would like to discuss any of the topics outlined above, or tell us about your favourite trends, do not hesitate to get in touch.

About Fineas Tatar

Fineas Tatar recently joined the strategy team and loves all-things tech, media and tennis. He has previously worked for an analytics start-up in San Francisco and is actively involved with the startup-up/VC ecosystem back in Canada.