When you strip out value related to the gigantic marriage of Comcast and NBCUniversal, merger and acquisition activity fell slightly in the entertainment and media industries in the U.S., but it should pick up in 2012.
According to a PricewaterhouseCoopers report set for release Tuesday, part of what will fuel M&A activity this year are online social networking companies that might go public or be willing to be acquired by established media corporations.
Strong valuations for content owners, tremendous corporate cash reserves and uncommitted private equity are also catalysts for driving healthy M&A activity.
Last year, total completed and disclosed M&A deal value increased to $52 billion in the U.S. from $27 billion a year before, but when $27.3 billion in deal value related to Comcast's acquisition of a controlling interest in NBCU, M&A activity decreased. Average deal value increased 25 percent year over year to $160 million but deal volume fell 14 percent to 687.
One big area PWC expects activity in is services that stream movies and TV shows over the Internet. "Non-traditional media companies are and have been looking to increase sending on future acquisition and development to establish themselves major players in the entertainment and media sector," the report says.
Other big areas this year could include the digital storage of media as well as online video games and Internet gambling, according to PWC.