Liberty Global-Discovery JV acquire All3Media (Hollyoaks, TOWIE, Gogglebox) for £550m
1andrew1
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Sky News The transaction, which is expected to be announced on Friday, will see All3Media owned by a new joint venture being established by the two US-listed media groups. Discovery and Liberty Global, which owns Virgin Media, a competitor to Sky News' owner BSkyB, are understood to be drawing up plans for further takeovers to create an independent global content platform.
http://news.sky.com/story/1257560/discovery-and-liberty-swoop-for-all3media
Interesting return to content for Liberty Global. Will LG be a sleeping partner to Discovery and use the threat of access to this content as a bargaining tool in negotiations with companies like Sky for their content?
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http://forums.digitalspy.co.uk/showthread.php?t=1961499
I have already said this about the deal:
Something which would lose the company money as they would be paying themselves for the broadcast rights for this country, rather than someone else paying.
Well, firstly I don't want the talent to be too fragmented compared to American Studios (which would make it easier for them to take them over), along with the fact I don't want to see the process of archiving diffuclt with multiple companies involved.
If I was in charge of broadcasting/IBA at the Home Office in the 80s, you would expect me to take a dim view in allowing independents to make programmes for British broadcaster.
LG has just pulled out of content in the UK with the sale of ChelloZone, Virgin Media did the same before its takeover, so it is now going back to it.
Interesting to see how it works out...
No I did not say that in this case, it is up to the broadcaster/content maker to deicide...
Liberty Global is a distribution network operator, Discovery Communications is a channel operator whose channels are carried on many of the cable systems operated by LGI.
Offloading Chellomedia and then getting involved in a Joint Venture to acquire All3Media is not a contradiction - All3Media is a Producer, whereas Chello is a Publisher/Distributor, as (primarily) is Discovery Communications.
What Liberty Global has done there is to move away from operating its own portfolio of channels to co-owning a provider of content that can be sold to any channel. What Discovery Communications has done is to increase its ability to source diverse programming for its own channels at favourable terms, and generate additional revenue from content destined for other networks.
Discovery has recently been looking to strengthen and expand the breadth of its programming, moving from science, technology and natural history content to include more 'reality'-based an 'pop-science' entertainment formats. Discovery's actual production operation is relatively small and the majority of its content is acquired/commissioned from outside companies, so having All3Media "in house" makes programming sense, particularly since the types of show that the various All3Media companies have experience in producing are precisely the genres that Discovery Networks are now moving into.
It is highly likely that the operational management and oversight of the All3Media companies will fall to the Discovery side of the JV, with Liberty fronting up a good proportion of the capital outlay for the purchase and benefitting from part-ownership of the revenue stream generated by All3Media, including all those primary and secondary content rights not vested with Discovery, and the Discovery channels themselves being enhanced by the additional content and revenue they've been able to generate through co-ownership of All3Media, which in turn makes the portfolio of DCI channels worth more to LGI's platform operations.
In business terms it's all quite logical, if perhaps a little complicated to the average "man in the street" (or on the forum!)
Can anybody explain why it's a better deal for Discovery? Is it just a case of it gives them a window to air some documentaries on C4 or am misreading it?
If Discovery buy Channel 5, they have to pay others to make stuff to put on it, or they programme it with other Discovery Channel shows (not all of which it actually owns the secondary rights to), which at best is simply moving money from one pocket to the other.
If Discovery buys All3Media then Channel 5 pays it for stuff to go on their network (as do other broadcasters), plus it can commission All3Media for product to go on Discovery's channels (presumably at favourable rates) which is simple pocket-to-pocket stuff again (ignoring for reasons of simplicity Liberty Global's share), and it has the opportunity to distribute All3Media product (both it's own commissions and those other broadcasters paid for) and get paid by secondary and overseas markets.
Put simply: they'll own a massive production company which produces programmes for BBC, ITV, Channel 4, Channel 5 and others. They're not going to replace Hollyoaks, TOWIE and Geordie Shore with documentaries, they're just interested in owning a very successful production business.
Regarding documentaries, All3Media is famous for programmes like Shameless, Skins, TOWIE, The Gadget Show and Hollyoaks. Good as these are I don't think they're documentaries although many are indeed shown on Channel 4.
I wonder if this deal might influence future indie requirements for the BBC. Many former indies are now no longer independent and are subsidiaries of multinationals like TimeWarner and Bertelsmann.
I will admit defeat on this matter , you have explained the deal in a much better way that I would do myself, thanks for the insight! ;-)