Wednesday, 14 September 2016 20:30

MSO Symposium Looks at International Business Models, Slow-Down in Consolidation


Future MSO Growth Gauged

But Romans looked forward as well as back in terms of consolidation, offering two projections for what he sees the industry looking like in terms of MSOs in 2020.
In terms of the “Big 4,” Romans forecasts they will grow from their current annual sales $3.7 billion and 10.9 percent market share to about $6.5 billion and a 17 percent market share by 2020. In a second, “more aggressive forecast” he said he based on “some claims that a couple of consolidators have made recently about where they might be,” he said the Big 4 may hit $7.5 billion or 19.7 percent market share by 2020.
When the franchise networks are added in, along with other MSO with annual sales of more than $10 million, Romans predicts this segment of the market will have 2020 sales totaling between $15 billion and $18 billion for as much as 47 percent market share.
Romans said whether that figure sounds startling or not “depends on your perspective.”
“For 4.5 years from now, I don’t think that’s a big deal,” Romans said. “I think it will start to be a big deal when those segments start to represent 60 percent or 65 percent of the market. That kind of structural change will be even greater than we experience today.”
In the even shorter-term, Romans said maybe the industry will be talking about the “Big 5” rather than the “Big 4.”
“I suspect maybe we’ll see maybe a fifth consolidator somewhere in the next 12-18 months that could come into this market and really mix it up,” Romans said. “It could be an international entity, or it could be another aggressive [U.S.] entity funded by private equity or some other financial channel.”

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