In the last few years, we’ve seen a flurry of mergers and acquisitions throughout the entertainment market, from major agencies to small production companies. In fact, you could go as far as to say ‘consolidation’ has been the word of the year in the entertainment market. As we see big names like Freemantel and Banijai aggressively pursue smaller indie banners, many accusations of the indie market ‘selling out’ are being flung- but is this the truth? And if so, why? Entertainment lawyer Brandon Blake, from Blake & Wang P.A, gives us his opinion as an industry expert.
A Flurry of Buyouts
Even MIPCOM, the Cannes-based international TV Market, was buzzing with both verified and speculated buyouts this year, signifying a shift in the global production business. You know mergers are in when you can hear that Rupert Murdoch’s two split businesses (Fox Corp and News Corp) are considering reuniting after a decade-long split. And it’s not just smaller companies- British-based ITV could well be up for sale soon.
No one can deny that the interest in more globalized production runs is booming. Especially as the more aggressive streamers look to local content production and non-English-language content as draw cards for new markets and subscribers. Demand for new series is at an all-time high. Sadly, the economy is not, with more than just the US battling under looming recession climates and soaring inflation.
Is Indie ‘Selling Out’?
It’s a recipe for some fantastic new content production. But it’s also one that makes it harder for smaller production companies to remain competitive. While upscaling is, of course, the dream for smaller outfits, for many it is simply not feasible. If big companies with plenty of money to fling into the fray come knocking, it is understandable that many may take the best deal on the table over an uncertain future.
For larger entities, there’s an interest in acquiring new IP and talent as never before. Likewise, we’re also seeing private equity companies move into the entertainment space at a rapid rate. So there’s a notable battle between streamers and studios- who want solid in-house production to leverage the best bang for their invested bucks- and independent medium- and large-scale production companies who want to remain competitive in the reinvented market. Staying independent could be a strong advantage if exclusive deals can be made with a range of powerful entities.
And all-rights buyout deals can leave a sour taste in the mouth. After all, asking talent to give their all, only to get nothing back for their success is a rather one-sided success story. And while we may be in the golden age of content, that isn’t exactly translating to a golden era for revenue sharing from the streaming entities capitalizing on that content.
Is it entirely fair to call the smaller indie production companies using these powerful deals to get their slice of the pie in a difficult climate ‘sell outs’? Not really. In larger entities, it would simply be labeled smart utilization of the market. Principals and dedication to promoting truly independent cinema is a lofty and respectable goal, but it doesn’t put cash in the bank the same way a lucrative buy-out deal can. However, as a global entertainment trend, it does have some worrying overtones worth considering. Is a landscape where only the largest companies survive truly the best future for entertainment? Probably not, but it may well become a reality.