Comcast and ViacomCBS JV, page-2

Interesting. Things are getting so crazy out there - I think it feels safer to be little 'ol SKT hiding out in New Zealand. I do wonder how the mid-sized players are going to go battling Netflix, and now Disney as well as Warner. A mid sized players is in their direct firing line. My sense is that Sky's (as in Sky UK, now under Comcast) major streaming play (Peacock) is not doing so well. I may be wrong.

My best guess is that if you are not one of the 2 (or maybe 3) biggest gorillas in the world, you're better off being a local champion with a niche competitive advantage. So for SKT, it's a local scale advantage in NZ over eye balls, a deep relationship with a local-interest content (for SKT this is particularly rugby, though perhaps also some other non-sport stuff) and also a deep knowledge of its customers. I think that trifecta of factors is pretty powerful (fingers crossed).

Using this framework as a guide (rightly or wrongly, hopefully rightly) I'm currently looking at other countries/markets that may have a similar trifecta of factors (local scale, relationships with local content, local knowledge of customers) to see if there are any interesting opportunities out there. I think the 'local' element is paramount. Take the Spanish market for instance. It has a local football (soccer) league with huge local interest. However, being an enormously successful league (La Liga being in the top 3 leagues of the football world) in a global sport, it has global interest. This is great for the local leagues, but not so good for the local media companies (ESPN, part of the Disney empire, has just paid crazy sums for the global rights), especially as the content wars keep ramping up.

My hope is that such a dynamic is less likely in New Zealand rugby (the local product I'm hoping is of vastly more interest to NZlanders than to a global market) - but I may be wrong.

Other interesting possibilities overseas are markets where the local culture (and language) provide additional barriers, not just in terms of local-interest content, but also in terms of the giant's ability to penetrate local eye-balls. I come back to the power of local media companies having established relationships with their customers. There is also the possible powerful factor of local production having relationships with these local champions - and perhaps even owning some of the content production capability (studios etc) (ie vertical integration) - something SKT is sorely lacking with the NZRL (if only SKT owned them!).

There are many countries OS with a long and rich history of cinema & film production - outside of the English language. The Spanish market is one such case. The Madrid region has developed a content ecosystem and has perhaps become the largest content production hub in the Spanish speaking world. It is true that the Spanish speaking world is large enough to be of interest to the global giants (and they have indeed been buying content from Spain to sell globally), and indeed some of the giants have been setting up capability in the Madrid region. That said, some of the local media companies have long standing relationships with and even own, some of this creative capability. Unlike creative talent in the English speaking world, this hub is less likely to lose talent to Hollywood. The bottom line, there are local media players that provide a clear path from this local content, to its most monetizable local market.

But, it's a work in progress for me.