Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Microsoft Is Not Playing Around
Microsoft announced a $69 billion deal for Activision Blizzard, the game developer that owns Call of Duty, World of Warcraft and King, the mobile studio behind Candy Crush, among many other game franchises, The New York Times reports.
The price tag makes it a blockbuster, but the deal is also exciting because of Microsoft’s push into gaming – it already owns Xbox and games like Halo – as a pillar of its content and advertising strategy. The Microsoft Audience Network, its ID-based ad-targeting service, includes Xbox accounts in its data.
It was also a canny purchase. Activision Blizzard stock was down from an all-time high of $101 in February 2021 to around $60 earlier this month. Gaming benefited from overall tailwinds, but Activision Blizzard was dragged by a string of sexual harassment suits.
This isn’t Microsoft’s first rodeo. It picked up LinkedIn for a song in 2016 after skittish investors ditched because of poor earnings reports.
As a multitrillion-dollar company, Microsoft can spend tens of billions of dollars on acquisitions and still consider itself a relative bargain hunter. In December, the one-time AppNexus business Xandr practically fell into Microsoft’s lap for free (or at least quite shy of one billion dollars).
Cheap At Twice The Price
Subscription-based streaming services are testing their stickiness as a wave of discounted services and free ad-supported offers wash over the market.
Netflix raised its prices for standard US and Canadian accounts to $15.50 last week, and Amazon Prime is rumored to be up for a price hike, in line with its previous rate increases in 2018 and 2014.
If subscriber growth slows, Netflix can only increase revenue by raising prices. But it’s a sign of strength that Netflix or Amazon can raise prices without suffering from serious churn.
Even other heavy hitters like Disney+, Peacock or Apple TV haven’t tested their value yet, because they still rely heavily on low and discounted prices.
Meanwhile, HBO Max is still offering big discounts on new accounts to deal with a drop-off in subs since last September when WarnerMedia pulled HBO from Amazon Prime. Hulu’s Live TV tier got more expensive, but Disney manufactured big savings by bundling Hulu, Disney+ and ESPN+.
The fact is, content is (almost) infinite – but wallets are finite. With only so many subscriptions to go around, the must-haves will flex their strength and everyone else will scrimp and scrape for a spot on the monthly credit-card statements.
Deals On Wheels
Here’s another hit in digital media’s never-ending M&A parade.
The Arena Group will acquire the magazine brand Parade and parent company Athlon Media Group for $16 million, Axios reports.
Known as Maven Inc. before a rebrand in September 2021, the Arena Group operates more than 200 digital publications, as well as other well-known magazine brands like Sports Illustrated.
The deal coincided with the Arena Group’s recent decision to move its shares from the OTCQX exchange to the venerable New York Stock Exchange.
The Arena Group says it earned $180 million in total revenue for 2021. A recent filing attributed 35% of the company’s revenue to advertising and 60% to print and digital subscriptions.
Although it hasn’t been audited since 2014, Parade claims 22 million in circulation. Its print magazine is bundled with major newspapers such as the Boston Globe, the Baltimore Sun and the Atlanta Journal-Constitution.
Parade’s acquisition by a digital publishing brand, much like Newsweek’s digital-driven transformation, is another example of one-time print powerhouses folding into digital ad companies.
But Wait, There’s More!
After years of griping about Nielsen’s outdated measurement practices, media giants are finally beginning to test ways to assess viewership ahead of the 2022 TV season. [Axios]
Kantar acquires the Italian machine learning software company MindIT. [release]
YouTube will shut down its original content production group. [Variety]
Altice taps Ampersand as the exclusive reseller of its national addressable inventory. [release]
How Leaf Group transitioned to being a commerce-dominant media company. [Digiday]
OSF Digital acquires Datarati, a Salesforce services and automation specialist. [release]
The ad-blocker maker eyeo spikes the football after winning another case against Axel Springer in Germany. [release]
You’re Hired!
Teads promotes Monique Pintarelli to CRO and to lead its US operations. [Adweek]
