2010 'a year of two halves' for the media sector

David Elms, Head of Media at KPMG considers the outlook for the media sector in 2010:

 

"I wouldn't be surprised if we see more media deals in early 2010, compared with the last six months of 2009. On the one hand - investor confidence has been boosted by improving financial markets and in the stabilisation of the underlying financial performance of companies. On the other - sellers aren't simply perceived as distressed anymore and vendors also appreciate that significantly higher valuations are unlikely to return in the medium term. 

"Some M&A is also likely to be driven by companies investing in their digital strategy.  In the fight against structural decline, media companies need to develop integrated business models which retain the strengths of the heritage models whilst experimenting with new ones.”

 "Some good news for traditional business models is that advertising on traditional media outlets could increase in 2010 compared to a desperate 2009 - understandably a particularly bad year.  The ad revenues generated during ITV's live showing of the X-factor finale demonstrates the benefits of mainstream TV.
 
"Of course the big unknowns in 2010 are the outcome of the general election and whether the Digital Economy Bill will become law?  The general election will make this a year of two halves, with businesses facing the dilemma of whether to act before the election or wait and see until after the election when there should be clearer visibility about where UK PLC is going.”


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For further information please contact:

Claire le Masurier, PR Manager, KPMG,  020 7694 8639 or 07795 074 360

 

About KPMG:

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff.  The UK firm recorded a turnover of £1.6 billion in the year ended September 2009. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 144 countries and have more than 137,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services.