Only three media companies from emerging markets have made ZenithOptimedia’s Top Thirty Global Media Owners list, two from China and one from Brazil. CCTV and Baidu from China came in at 23 (one place ahead of Facebook) and 28 (before Microsoft) respectively, while Brazil’s Globo was positioned at 20. It’s the first time Chinese media companies have made the global outfit’s annual reckoning.
Unsurprisingly, Google took top place with revenues 47% higher than the second largest, DirecTV. This gap has widened from 39% in last year’s edition of the report, as Google’s core search function has benefited from the rapid rise in search volumes from smartphones and tablets, ZenithOptimedia reported.
“The arrival of CCTV and Baidu in our Top 30 list is testament to the size and dynamism of the Chinese market,” says Jonathan Barnard, head of forecasting at ZenithOptimedia. “But we expect a much greater presence from emerging market media owners once they start to expand their international operations in earnest. The rise of the internet has created a new type of media owner – the intermediary – which generates its revenue by connecting consumers with contents and with each other. However, the production of compelling content lies at the heart of the media world, and content producers still dominate the Top 30.”
Among the rest of the top five, DirecTV remains in second place and Comcast remains in fifth. Disney has overtaken News Corporation to take third place, after News Corporation split into two separate operations. One of these – 21st Century Fox – comes fourth in the ranking, while the new News Corporation is in twelfth place. Cox Enterprises has moved up from eighth to seventh, and BSkyB has risen from tenth to eighth. Bertelsmann has slipped from seventh to ninth, while CBS Corporation has dropped from ninth to tenth.
CCTV is China’s national state television company that boasts 22 free channels and 23 pay-TV channels and accounts for about a quarter of China’s TV ad market. Baidu is the country’s main search engine, the local equivalent of Google, which does not operate in China. Like Google, Baidu has diversified away from basic search, and offers maps, social media, question answering and many other services.
Most of the top media owners are international in scope
Most companies in the Top 30 have operations in more than one country, and many are truly international in scope with operations around the world. Only seven companies are essentially devoted to one market: Baidu, CCTV and Globo, plus Cox Enterprises in the US, and the three Japanese companies Asahi Shimbun Company, Yomiuri Shimbun Holdings and Fuji Media Holdings. Given the large size of many emerging advertising markets (China being the third-largest in the world and Brazil the sixth-largest), the low representation of companies from emerging markets in this list is surprising, and can be explained by the fact that most media owners in the developing world are confined to their home markets. Some emerging market media owners – such as Zee Entertainment in India – have started to expand internationally.
The big five internet companies
The arrival of Baidu means there are now five pure-play internet media owners in the Top 30, up from four last year: Google, Yahoo!, Facebook, Baidu and Microsoft. Between them they attract 67% of all global expenditure on internet advertising. This demonstrates how power in the internet ad market currently belongs to the intermediaries – companies that connect consumers with the content they’re looking for, or with each other – rather than to the content producers themselves. These five intermediaries account for 21% of all media revenue generated by the Top 30 media owners.
Content producers still dominate
Despite the rapid rise of the internet intermediaries, content producers continue to generate the majority of media revenues. 22 companies in the Top 30 are traditional media and entertainment companies that create and distribute their own content. Between them they account for 64% of the combined media revenues of the Top 30 media owners.
Deconsolidation of publishing and broadcasting
Since the last edition of this report, the former number-three media owner News Corporation has split into two: 21st Century Fox and the new News Corporation, which take fourth and twelfth place in our new ranking respectively. The split was designed to provide more corporate focus to the two companies – 21st Century Fox has taken over most of the television and film interests of the former corporation, and the new News Corporation has taken over the publishing interests. It was also intended to raise the valuation of 21st Century Fox by removing its association with the declining publishing industry. A similar rationale lies behind the spin-off of Time Warner’s magazine publisher Time Inc., due in the second quarter of 2014, which will leave Time Warner with its television and film units. Time Warner is large enough that it will remain in sixth place even without its magazines, while Time Inc. will not place within the Top 30.
Zentih Optimedia’s Top Thirty Global Media Owners report is a ranking of the world’s largest media companies by media revenue.
ZenithOptimedia defines media revenue as all revenues deriving from businesses that support advertising – television broadcasting, newspaper publishing, internet search, social media, and so on. This includes not only advertising revenues but also other revenues generated by these businesses, such as circulation revenues for newspapers or magazines, or subscription revenues for pay-TV. For publicly listed companies, the revenue figures are taken from their annual report and accounts; for the privately held companies, the revenue figures are ZenithOptimedia estimates.
Image: CCTV in China, headquarters
