The number of media and telecom deals rose about 28% this year, with 1,014 transactions valued at $469 billion, according to PricewaterhouseCoopers. The figures come as Elon Musk’s pending $44 billion takeover of social media giant Twitter and Microsoft’s upcoming purchase of video game maker Activision Blizzard for $68.7 billion dominated the landscape.

Media deals were more on the internet and software side, according to PwC, although Amazon agreed to purchase movie studio MGM in March for $8.5 billion. In its Mid-Year Deals Outlook report, PwC Deals Partner Bart Spiegel and Technology, Media and Telecommunications Deals Leader Alan Stephen Jones wrote that M&A “activity has recently slowed among some of the major media companies, after a peak driven by content and technology acquisitions to fuel expansion of streaming services.”

But PwC was optimistic that deal growth will continue in the media and telecom sectors, adding that the volume of activity hasn’t slowed despite inflation and rising interest rates. The research giant added that while the pace of deals may slow, a significant amount of cash remains in the system to get deals done. And as always, “businesses are under pressure to transform; the fastest way to do that is through M&A,” PwC said.

According to PwC, private equity players accounted for a big chunk of transactions — increasing to 42% of deals in the past 12 months from 24% in 2018. All in all, private equity deals represented $194 billion of announced deal value, of which 75% were concentrated in the internet and software sectors, PwC said in the report.

Other key drivers include the demand for sports content, as the combination of streaming, ad sales opportunities, sports gambling and other tailwinds have boosted team and league values. PwC also pointed to huge streaming music content deals for legendary musicians like Bob Dylan, Neil Young and Bruce Springsteen, as well as the shift to digital advertising and an emphasis on audience targeting and engagement tracking, as catalysts for deals. ■

Programmatic advertising may be the future, but the extension of automated processes to the premium digital video world, including video delivered over the top, continues to lag well behind the digital display advertising industry.

That’s the consensus from a fresh PricewaterhouseCoopers study on the topic, sponsored by the Interactive Advertising Bureau.

The study, which based its findings on a mix of survey results, corporate and industry data and interviews with senior ad executives, found that programmatic revenues reached $10.1 billion in 2014, and comprised about 20% of total Internet advertising revenues ($49.5 billion), a figure that factored in mobile-related advertising.

Programmatic revenues made up about 52% of display ads ($19.6 billion) last year, outpacing nonprogrammatic display-related revenues. The majority (70%) of programmatic inventory was bought and sold through “Open Auctions,” though PwC expects other types of approaches, including private auctions, unreserved fixed rate and automated guaranteed, to absorb more share in the next few years.

Broken down further, programmatic revenues from ad tech companies (55%) outweighed those from the publishers themselves. Display banner ads made up about 80% of programmatic revenues in 2014, but more advertisers and publishers are expected to shift their budgets and inventory toward mobile and OTT/digital video formats over time.

Programmatic video advertising remains a small-but-growing sector as more viewing occurs on mobile and other IP-connected devices.

“[T]he adoption of programmatic video in 2014 was hindered partly due to the scarcity of available premium-video inventory,” PwC noted. “As eyeballs have shifted away from traditional TV viewing to newer forms of video consumption, including online and mobile devices, brands want to connect with their audiences at the right time and right place. For video that often means through premium publisher inventory, but it is often not available for advertisers via programmatic channels.”

However, what little premium video inventory there is tends to sell out through more traditional digital direct sales channels.

“As a result of this demand, premium video publishers are able to sell their inventory directly and can negotiate deals with advertisers at a premium price. Inventory that goes unsold (remnant) on premium video publishers, which is often less valuable, is then pushed to the programmatic channels,” PwC said.

The study also took a stab at the somewhat controversial definition of the programmatic term itself, centering it on “machine based buying and selling of digital media, including auction based methods like RTB [real- time bidding] and private marketplaces, as well as the automation of direct sales, sometimes called programmatic direct.”

Wearable technology is expected to drive growth in the entertainment and media sector as more and more (and younger and younger) consumers adapt devices and monitors that are not only worn, but woven into the very fabric of their wardrobes, according to a recent study by PricewaterhouseCoopers.

Wearable technology made a splash a few years ago with Google Glass, basically a computer with a head-mounted display. Earlier this year Apple upped the ante with the Watch, a wearable device that is capable of receiving phone calls, messages and texts, and controlling other Apple devices.

New devices on the drawing boards include monitoring technology woven into clothing that can detect heart rates and blood oxygen during exercise, as well as futuristic communications devices like wrist phones. 

According to PwC’s The Wearable Future, companies in the entertainment and media sector could have the largest growth opportunity in the wearables market. PwC estimates that about 2 million smartwatches were sold in the U.S. in 2013, and as of March 14, 3.3 million fitness trackers had been sold in the country. That number is expected to grow to 19 million this year (for smartwatches, headsets and activity trackers) and with projections that sales of wearable devices could reach 130 million units in 2018, the prospects are enormous.

PwC, in conjunction with researcher BAV Consulting, surveyed 1,000 consumers (across age, gender income and regions) via a 25-minute online questionnaire to examine the positive and negative trade-offs of wearable technology and to gain insight on how values, attitude and behaviors will shift once these technologies become more mainstream. As a result, PwC determined that:

·                     About 73% of respondents expect wearable technology to make media and entertainment more immersive and fun, with millennials responding in the positive at an even higher rate (79%). As expected, more millennials (64%) said they would be excited to try a wearable technology product introduced by an entertainment or media company than the general population (42%).

·                     As social media becomes the vehicle for which more and more information is received, consumers want wearable technology to offer anytime/anywhere access to their favorite networks. This is especially resonant with younger viewers – millennials were three times as likely as the general population to list real-time social media updates as an important benefit of wearables.

·                     About 97% of American children ages 12 to 17 play an average of one hour of video games per day. Wearable technology is poised to offer a host of new platforms and devices to make gaming more visually and physically engaging than ever before. About 64% of consumers ages 18 to 24 say they would be motivated by this.

·                     Additionally, wearables open up more advertising inventory – blank canvases for highly targeted message placements, especially in the form of content with greater relevancy and context to the user and can also provide a meaningful opportunity to drive product sales and e-commerce.

“The media company of the future must combine insights with curated experiences, and find new ways of monetization – not merely through conventional advertising and paid content offerings. Wearables offer media companies a huge new frontier of relevance and immersive experiences, helping to engage audiences by providing the most relevant content,” said PwC’s U.S. advisory entertainment, media & communications leader Deborah Bothun, in a statement.