Investments in Multi-Channel Networks (MCN) by traditional media and communications groups have continued into 2016, albeit at a slower pace than in previous years. Yet while purchase prices soar ever higher - Verizon headlined earlier in 2016 with its acquisition of a stake in AwesomenessTV, valuing the company at $650m - an update to Ampere's 2015 review of MCN acquisition trends reveals a downward trajectory in the value that purchasers are willing to place on MCN audiences.
Analysis of an expanded set of MCN investment and acquisition deals indicates that value per monthly view has declined by 25% over the past five years - from an average of 12 cents per monthly view in 2012, to 9 cents per monthly view in 2016. However, this decline does not necessarily reflect concern regarding the underlying fundamentals of MCNs, but rather the fact that the businesses themselves are maturing and their anticipated growth rates slowing. Company valuations are always a factor of risk and reward, and while the market positioning of MCNs is becoming increasingly solid, the opportunity for triple-digit year-on-year growth is now waning. For the MCN sector, this means that the valuations of their businesses are now - on average - likely to grow at a rate slower than that of the expansion of their audiences - unless they can illustrate substantially improved income growth on a per viewer basis.