April 23 (Bloomberg) -- Consolidation in entertainment, media and communications this year will be driven by consumers’ thirst for instant access to programming and bandwidth to support it, according to PricewaterhouseCoopers LLP.
Consumer demand has set off a race among media companies to obtain more content, and among distributors to expand pipelines to deliver programs anywhere, anytime, according to the report from PricewaterhouseCoopers, the New York-based accounting and consulting firm. International broadcasters are also investing in U.S.-based production companies to fulfill demand, according to the report.
Licenses for radio waves are scarce and becoming more expensive, as the Federal Communications Commission runs low on new frequencies it can offer -- helping to trigger a bidding war for Sprint Corp. Consumer demand for ubiquitous viewing is also prompting acquisitions of content creators, according to the report.
Netflix Inc.’s estimated $100 million investment in “House of Cards,” the original program shown exclusively on its $7.99-a-month online service, was cited as an example of new demand for shows. Walt Disney Co. spent about $4 billion on Lucasfilm, underscoring the value of content creators.
Sprint Corp., the third-largest U.S. mobile-phone company, is the subject of competing takeover bids from Dish Network Corp. and Tokyo-based Softbank Corp. Dish Chairman Charlie Ergen is looking to turn his satellite-TV provider into a wireless juggernaut. Softbank’s Masayoshi Son seeks to create a cross-border competitor to Verizon Wireless and AT&T Inc.
Dish, based in Englewood, Colorado, offered $25.5 billion for Sprint last week, topping a $20.1 billion bid by Softbank in October. Virgin Media Inc., the provider of pay-TV service in London, is being acquired by John Malone’s Liberty Global Inc. for $18.3 billion.
As they bulk up, media and communications companies are getting rid of their less attractive businesses, according to Pricewaterhouse, citing Time Warner Inc. and Tribune Co.
Tribune, the Chicago-based company that emerged from bankruptcy last year, said in February it hired JPMorgan Chase & Co. and Evercore Partners Inc. as financial advisers after receiving interest in its newspapers. Time Warner, based in New York, said in March it will spin off its Time Inc. magazine operation.
The S&P 500 Media Index, which includes Disney, Time Warner, News Corp. and other large content companies, has advanced 17 percent this year, and 42 percent in the past 12 months, according to data compiled by Bloomberg.
As new technologies challenge media businesses, big players such as Apple Inc. and Google Inc. will also keep investing in entertainment, media and communications, according to the report.
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