🎥 Mediawan - A Machine To Produce & Scale IPs
Overlooked #98
Hi, it’s Alexandre from Eurazeo (ex. Idinvest). I’m investing in seed & series A consumer and consumer enablers startups all over Europe. Overlooked is a weekly newsletter about venture capital and underrated consumer trends. Today, I’m sharing a short deep-dive on Mediawan which is a European leading video producer of premium content.
In Dec. 21, I’ve come across Mediawan 3 times: (i) watching a documentary produced by Mediawan on Orelsan on Amazon Prime, (ii) listening to a podcast with Pierre-Antoine Capton (in 🇫🇷) and (iii) digging into French SPACs for my report on the State of the French Ecosystem.
I believe that it’s a great story to share because Mediawan is building an IP creation and scaling machine - which is something that is extremely hard to execute but which is something that can pay back big time when you know the value of top franchises like Pokemon or Star Wars.
I divide this deep-dive into 3 sections:
What is Mediawan?
A quick history of Mediawan
Why is Mediawan an interesting company?
Part I - What is Mediawan?
Mediawan is a pan-European media conglomerate founded in Dec. 2015 by Pierre-Antoine Capton, Xavier Niel and Matthieu Pigasse.
Pierre-Antoine is the video content expert and is leading Mediawan on a daily basis. In 2001, he started a video content production group for French TV channels called 3 oeil which produces several formats (unscripted shows like C a Vous, series, plays, etc.). 3 oeil is now also part of Mediawan.
Xavier and Matthieu are working part time on the project bringing complementary skills to the table like a general media expertise (Xavier and Matthieu are shareholders of French media group Le Monde, Xavier is the founder of French telco Free/Iliad which has a TV offering) and a M&A expertise (Matthieu was the former head at Lazard and is now managing Centerview’s Parisian office).
The company is specialised on video and is involved in the whole value chain from production to distribution and broadcasting. Its mission is to gather talents, give them freedom, help them on financing and distribution if needed and make sure that they will be massively distributed on all types of platforms. Mediawan has 4 main activities:
Mediawan Originals: video content production of fiction, cinema, documentary and unscripted shows with 40 different production labels in several European countries (France, Italy, Spain, Netherlands, UK and Finland).
Mediawan’s production labels Mediawan Animation: video content production of animated series and animated movies with brands like Le Petit Prince, Robin Hood, Peter Pan, Iron Man or Miraculous Ladybug.
Mediawan Rights: video content distribution with a diversified catalogue of 20,000 hours of content that Mediawan distributes to large broadcasters and platforms across the globe.
Mediawan Thematics: video content broadcasting i.e. management of 17 TV channels in France (specialised content on cinema movies, mangas, history, science, automobile, animals etc.) and Belgium (2 free channels called AB3 and ABXplore).
Mediawan was the 1st SPAC on the French public stock exchange back in 2016. At the time, SPAC were not under the spotlight - even in the US. In Dec. 20, Mediawan's founders, MACSF and KKR partnered to take the company private because they thought that it was undervalued by the public market. It may be a premonitory signal to what may happen to many recently companies which went public via SPACs.
The company is a serial acquirer. It has done 20+ acquisitions since its inception in 2015 in 3 main directions: (i) acquire content libraries and content production studios, (ii) expand internationally to become a pan-European player, (iii) expand into new video genres (e.g. unscripted shows with Lagardère Studios or premium documentaries with Black Dynamics).
In 2020, Mediawan did €1bn in sales with 1.2k employees in 10 countries (mainly Europe). In 2021, Mediawan invested €500m in content production and has 60 production labels.
Part II - A quick history of Mediawan
In Dec. 2015, Mediawan was founded as a SPAC. In Apr. 2016, it went public and raised €250m to merge with one or several companies in the media or entertainment sectors.
As a reminder, a SPAC is a Special Purpose Acquisition Company. It's a blank check company that list on the public market to you raise capital. These funds will be used to acquire in a certain timeframe one or several private companies. During this timeframe, when SPAC's creators identify one or several targets, they will offer to shareholders to merge the blank check company with the target(s). If shareholders accept, the merger will happen and target(s) will start to be traded on public markets like for traditional IPOs.
In Jan. 2017, Mediawan offered to merge with Groupe AB for an enterprise value of €314m funded with the €250m in cash raised through the SPAC as well as with €130m in debt - a transaction which was accepted by shareholders in Mar. 2017. Groupe AB was already a video content player present across the full value chain from production (ability to produce 80h of content per year) to distribution (12,000 hours of content) and broadcasting (19 TV channels).
In Jul. 2017, Mediawan acquired CC&C (Clarke Costelle & Co) which is a video content producer specialised in historical series which is the owner of the brand Apocalypse, producting documentaries on the 20th century.
In Sep. 2017, Mediawan launched a new TV channel in Belgium called ABXplore dedicated to entertainment around 3 key themes (adventure, automobile and extreme sports) which are thematics on which Mediawan was already strong in France.
In Jan 2018, Mediawan acquired the Europacorp's subsidiary dedicated to series (except US series) with shows like XIII, No Limit, Les Bleus or Taxi Brooklyn.
In Mar. 2018, Mediawan acquired a majority stake into Makever which is a French video producer behind brands like Cherif, Kaboul Kitchen or Les Bracelets Rouges.
In Jun. 2018, Mediawan acquired a majority stake into On Kids & Family, a European leader in series and movies animation with strong brands like Le Petit Prince, Playmobil, Robin des Bois, Miraculous Ladybug or Ironman.
In Oct. 2018, Mediawan acquired a majority stake into Mon Voisin Productions (60% stake) which is beyond the French series Dix Pour Cent.
In Dec. 2018, Mediawan acquired a majority stake into Mai Juin Production which is behind TV movies like Le Loup et le Lion or Mia et le Lion Blanc.
In Feb. 2019, Mediawan acquired a majority stake into Palomar which is a top independent video producer in Italy doing series, movies and documentaries.
In Mar. 2019, Mediawan acquired a majority stake into Nice Pictures which is Joann Sfar's video production company specialised in animation (e.g. Petit Vampire).
In Oct. 2019, Mediawan signed a 10-year partnership with Canal+ in Africa to (i) produce content, (ii) distribute Mediawan content in Africa, (iii) distribute Mediawan TV channels in Africa.
In Dec. 2019, Mediawan acquired a majority stake into Black Dynamite Production specialised in documentaries (Omar Sy, K Benzema, Teffy Riner, Les Bleus: Une Autre Histoire de France).
In Nov. 2020, Mediawan closed the acquisition of Lagardère Studios from Lagardère for €100m. It's a European production studio mainly for unscripted shows (C Dans L'air, Ca Commence Aujourd'hui) with additional activities in series (Joséphine Ange Gardien) and documentaries (Gregory). Lagardère Studios has also 10,000 hours of contents in its catalogue.
In Nov. 2020, Mediawan opened a production hub in Spain following several acquisitions to strengthen its presence in the country with Grupo Boomerang (Spanish subsidiary of Lagardère Studios, 100 entertainment productions for Spanish TV), Good Mood (Daniel Ecija's production company who created 30+ series and 8 movies) and Weekend Studio (production of TVs and series which have a global ambition, produces a series called Hache on Netfliix). It had 3 main objectives: (i) recruit top production talents in all formats (series, movies, unscripted), (ii) reinforce synergies within the group with co-production & co-distribution and (ii) build relationships with local broadcasting companies.
In Dec. 2020, Mediawan was taken private by a consortium with Mediawan's founders (Pierre-Antoine Capton, Xavier Niel and Matthieu Pigasse), KKR, Bpifrance and MACSF. This operation also added two businesses to the media conglomerate with a minority stake in Leonine (a leading German independent video producer) as well as Troisième Oeil (Pierre Antoine's production company).
In Mar. 2021, Mediawan launched Explore on Apple TV which is a subscription offering dedicated to documentaries with 500 hours of content.
In Apr. 2021, Mediawan signed a partnership with podcast production house Louie Media to have a 1st look to adapt their podcasts into series or movies.
In Jun. 2021, Mediawan launched a subscription offering dedicated to cooking on Amazon Prime for €1.99 per month with 150 hours of content.
In Jul. 2021, Mediawan acquired French production studio Chi-Fou-Mi (which has produced or co-produced movies like Le Chant du Loup, Le Grand Bain ou Bac Nord) and a UK production studio Drama Republic (which has produced Doctor Foster for the BBC or The Irregulars for Netflix).
In Oct. 2021, Asmodee announced a partnership with Mediawan to bring Loups-Garous board game (13m players worldwide) to the cinema with a movie that will be realised by François Uzan (Lupin, Family Business, etc.).
In Dec. 2021, Mediawan launched Insomnia which is an offering on Amazon Prime totally dedicated to horror movies with 80 different movies. It means that Mediawan has now 3 niche subscription offerings accessible via third party platforms like AppleTV or Amazon Prime. In France, people who are streaming subscribers have on average 1.7 streaming services and spend €15.20 per month. Mediawan is betting that many households would be ready to combine a Netflix offering with a less expensive and niche subscription offering depending on their tastes.
Part III - Why is Mediawan an interesting company?
1/ An IP Creation Machine
I believe that the ability to productize IP creation remains an under-rated skill. Successful IPs are extremely valuable (cf. Pokemon, Hello Kitty, Mickey Mouse). You can leverage them in their original format almost infinitely (e.g. Pokemon is releasing 1-2 games every year) and you can decline them across multiple formats (e.g. Pokemon is now a movie, a series and a TCG game).
But it's extremely hard to productize IP creation because you're talking about productizing creativity. Mediawan does it by aggregating 60+ production studios under a single umbrella and by giving them total creative freedom.
This strategy is starting to pay off with IPs that are becoming popular and being scaled like Miraculous (scaled across formats with a movie and with a video game) or Dix Pour Cent (scaled in several geographies).
Mediawan can become a massive business if (i) it manages to retain its top creative minds and (ii) it builds an IP exploitation muscle to scale IPs across media formats.
2/ A Business Based on a Legal Breach
In Europe and more specifically in France, content providers (TV channels but also streaming platforms) are required to finance local and independent productions to support local production ecosystems. Mediawan is building a pan-European one stop shop for these content providers with studios all over Europe able to produce high quality content across multiple genres (series, movies, animated, documentaries, unscripted).
3/ Embracing a Consumption Shift
Video consumption is shifting completely. From television to streaming platforms. From linear consumption to on-demand consumption. From advertising based to subscription based.
Mediawan is a production powerhouse that is exploiting this consumption shift by having a proper content offering to sell to streaming platforms but also by testing new monetization formats (e.g. niche subscription on cuisine, horror movies or documentaries).
4/ SPAC Premonition
In 2015, Mediawan was the 1st SPAC listed on the French public market. In Dec. 2020, Mediawan was taken private by a consortium led by its founders.
Covid impacted Mediawan's business with delays and increased production costs. It was a hard time for the stock and the trigger factor to take the business private.
But I think that the public stock market was not adapted for a company like Mediawan for several reasons: (i) Mediawan did not have the scale to be sufficiently flagship to attract an institutional base of investors, (ii) building an video IP creation machine is a long term plan not adapted for public market short term mindset, (iii) Mediawan's sales are irregular mainly dependent on the last quarter of the year when content is delivered, (iv) public markets struggle to understand corporations who are serial acquirers.
I think that in the next 3-4 years, we will hear many similar stories on the companies that went public through SPACs in 2021.
5/ A Serial Acquirer
Mediawan is a serial acquirer having acquired and integrated 20+ acquisitions over the past 5 years. It's a great muscle to have as a business to be able to identity, assess, win and integrate companies.
In terms of value creation, M&A deals have a high failure rate (50%+) for several reasons: (i) the acquirer will never have a full knowledge of the acquired company before the deal is closed, (ii) the integration of the target is complex and (iii) it’s long and time consuming to make M&A transactions successful.
Serial acquirers tend to outperform other acquirers in terms of value creation because they have a developed M&A muscle with internal M&A competencies, M&A processes in places, an history of knowing what assets will fit with their business, a strong discipline on pricing, etc.
Thanks for reading! Thank Julia for your feedback! 🦒 See you next week for another issue! 👋