The Evolution of Media Company CMS Platforms: TV Market Consolidation
So far in this series, I’ve given an overview of the media and entertainment industry and why companies have selected different CMS platforms, as well as taken a deep dive into the world of third-party integrations that many media businesses utilize.
What has become clear is that there is an established group of CMS platforms designed to address the specific content production and distribution needs of media industry segments, including newspaper and magazine brands, broadcast TV and radio stations, sports leagues, entertainment venues, and so forth.
In the next couple posts, I will look at the business and technology trends in the media industry that are making these CMS platforms obsolete, and later determine where the opportunities lie for Acquia and Drupal to be the solution for companies looking to replace their burning platforms.
Let’s start with the business trends that are driving these media specific CMS platforms towards extinction. The biggest nail in the coffin of these CMS players is media industry consolidation. On September 8th, 2015 a new record for mergers & acquisitions (M&A) activity for major U.S. corporations was hit when Media General’s acquisition of Meredith Corp was announced. That media merger announcement took US M&A activity to $1.503 trillion in announced transactions, according to data firm Dealogic. Fortune points out “1999 had been the previous record for U.S. M&A, when activity totaled $1.497 trillion, and that tally was for the full year.”
From my experience, the average mid-sized media company has about 20 or so radio, TV, or magazine brands, and likely has about three different CMS systems in use across their various properties. So when media company X merges with media company Y - all of a sudden the complexity grows significantly, and you could end up with a newly combined company that has as many as six different CMSs. A media company merger can trigger the technology teams to evaluate vendor complexity, and work towards a path of consolidating onto a single platform. This media industry consolidation trend is putting pressure on the providers of media CMS platforms. In fact, the media oriented CMS platforms themselves are consolidating. Here are a few examples.
CMS Platforms for Local Television Consolidate
Worldnow CMS is a service primarily suited for local TV stations. During the summer of 2015, the company was acquired by a relatively unknown digital messaging app, Frankly. This acquisition left many wondering, how can a CMS platform and a messaging app align? Frankly CEO Steve Chung told TVNewscheck.com that Frankly’s messaging platform and Worldnow’s CMS platform are synergistic, because the duo enables TV audiences to be directly in contact with their local media outlet’s newsroom. This could lead to a more social media oriented newsgathering workflow and social audience interaction. It would also enable the ability to direct message the millions of users on the app with news items.
Regardless, the core area of focus for Worldnow’s new owner is not to operate as a CMS, and that may be a negative in the eyes of remaining Worldnow customers who are relying on its CMS platform. Previously, Worldnow counted TV station owner Raycom as a 37 percent owner of its platform, which meant that they had considerable input into the focus of feature development at Worldnow. Today, Raycom is only a 20 percent owner after the sale of Worldnow to Frankly, which likely means that they have less of a say in what features are priority in the product roadmap.
The merger resulted in other changes besides the change in direction for the company. Fox’s Owned and Operated TV stations defected from Worldnow after Frankly bought the platform and they moved on to another local TV focused CMS platform, Lakana.
Lakana is a company that was formed in the spring of 2015. Its establishment brought together three different CMS solutions each focused on serving local TV stations: the former Internet Broadcasting CMS, End Play CMS, and Inergize Digital.
What’s interesting here is that Lakana is in fact owned by a different media company - Television station owner Nexstar Broadcasting - that has about 100+ TV stations across the U.S. and is making bids to own more.
As I mentioned in the last post, media companies sometimes undertake custom technology development and build their own CMS platforms. Once they have made that investment, it makes sense to try and sell it to their peers in the industry to monetize the platform. This idea is very much like how tech news network CNET sold its CMS to Vignette (now Open Text). Interestingly, parts of Lakana’s technology come from other media companies outside of its owner Nexstar, too. If you trace the lineage of the End Play CMS part of Lakana, you find it was a platform that was one part of the (now defunct) Fox Interactive group at 21st Century Fox. There is even a deeper layer of knowledge here -- End Play was a customized version of Liferay CMS and Internet Broadcasting was a customized version of Core Media CMS. The many levels of complexity here are staggering.
While this CMS consolidation can streamline efforts for many organizations, there is a definite downside to it as well. Take Lakana, for example, who has merged their customer pool right along with merging their three independent businesses. Where the customers of each individual company used to be tied to one roadmap with one CMS, they’re now tied to a roadmap with inputs from three separate arms of the business, which means that each individual customer has a lot less say in what roadmap features come about. Individual customer priority is no longer a company priority.
As a solution, I would argue the adoption of an open source CMS like Drupal, to save media companies from getting caught up in the many issues that arise from being locked into a proprietary roadmap, and having to pivot any time a business objective changes, or a CMS consolidation like we’ve discussed occurs. I’ll discuss this more later on. For now, let’s look at another market that is experiencing similar consolidation pains: Local Television.
Meanwhile, Local Television Companies Consolidate
Sinclair Broadcasting is the U.S.’s largest owner of local TV stations, and it has grown rapidly via a series of acquisitions totalling almost $4 billion over just a few years. By 2014, the company was managing more than 163 TV stations, each with corresponding digital properties that were on six different CMS platforms. Instead of attempting to consolidate down to any one of the existing CMS systems or merge them, Sinclair decided instead to build a custom CMS with the goal of gaining independence from a proprietary roadmap (like they would have with Lakana or Worldnow). The idea to move away from a proprietary platform is a good one, but if Sinclair acquires any more digital properties, they will have to migrate those on to their custom platform too. If they chose instead to replatform with an open source CMS like Drupal, they would likely have a much easier time migrating new brands into the network.
Meanwhile, in the U.S. public media arena, almost all local, publicly funded TV and radio stations use an open source CMS. By our analysis, the split is 80 percent Drupal and 20 percent Wordpress. You can infer that the main reason for this is the appeal of a lower total cost of ownership (TCO) as the platforms are license-free.
Today, Entravision, Tribune Television, and CBS Owned and Operated are the only three US TV station groups out of the top 20 that use an open source CMS, specifically Wordpress. As the number of television station ownership groups shrinks, and the size of these companies grows, expect to see more movement in the customer bases of proprietary CMS platforms.
Consolidation isn’t just happening across the television space, however -- we see significant changes happening in other media industries as well, including radio and newspaper. I’ll dive into those markets in my next post.