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Content boom driving postproduction market consolidation

Tim Baysinger
Illustration of a stock trend line on a movie theater screen

Illustration: Annelise Capossela/Axios

The postproduction space has become one of the hottest deal markets in the media sector, as evidenced by two more deals from Streamland Media and Cinesite on Tuesday.

Why it matters: Postproduction is among the fastest-growing markets in the content business and is expected to grow by more than $20 billion over the next five years, according to a recent study by Technavio.

Driving the news: Cinesite announced that it's taking a majority stake in animation house Squeeze. Streamland said it's buying visual effects house Ingenuity Studios. The announcements came within hours of each other.

  • For Streamland, it continues a buying spree: In 2021, the Los Angeles-based company acquired the postproduction businesses from Technicolor for $36.5 million and Sim Video International for an undisclosed sum.
  • Both deals, as well as Ingenuity, were financed by Trive Capital and Five Crowns Capital.
  • Canada-based Squeeze was Cinesite's second deal this summer, following L’Atelier Animation last month.

Yes, but: The high demand for postproduction work coupled with a less-efficient remote workflow has led to a backlog of services, which in turn has caused some major special-effects films to be delayed.

The big picture: Visual effects (VFX) companies became a hot commodity during the pandemic, fueled in part by a boom in animation production. The return of special-effects heavy films to theaters has also led to an increased demand for postproduction services.

  • In that same timeframe, the postproduction space has seen a land grab by some of the biggest players as they try to offer films and TV shows a larger suite of services in as many markets as possible.
  • In late 2020, London-based Framestore — behind films like "Blade Runner 2049" and "Gravity" — acquired postproduction banner Company 3, VFX business Method and their sister companies.
  • Even famously deal-hesitant Netflix has gotten into the game by announcing a deal for animation studio Animal Logic last month.
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