Vivendi, the French media conglomerate, has been quietly building its content empire. While headlines focus on the drama surrounding Telecom Italia and the Lagardere acquisition saga, a closer look at their recent earnings call reveals a subtler, yet potentially more significant story. Vivendi is laser-focused on becoming a global content powerhouse, and they're willing to spend big to get there.

During the Q4 2022 earnings call, Vivendi emphasized the "unstoppable worldwide consumer appetite for culture media and entertainment," highlighting a PwC report predicting a 4.6% CAGR for the industry through 2026. But their strategy goes beyond simply riding the wave of industry growth. Vivendi is aggressively pursuing acquisitions, strategic partnerships, and internal development to assemble a formidable content library capable of competing with streaming giants like Netflix and Disney+.

While the proposed Editis-Lagardere merger, pending EU approval, dominates the conversation, Vivendi's smaller, more strategic acquisitions often fly under the radar. The company has been steadily increasing its stake in MultiChoice Group, a leading South African pay-TV provider, now owning a significant 30% stake. This move gives Vivendi a powerful foothold in the rapidly growing African market, a region with a burgeoning middle class and a voracious appetite for entertainment.

Vivendi's ambitions extend far beyond Africa. Their communication subsidiary, Havas, completed a record eight acquisitions in 2022, expanding their reach in key markets like the UK, Spain, Australia, and China. These acquisitions weren't just about geographical expansion; they focused on bolstering Havas' expertise in critical areas like digital marketing and content creation.

Vivendi's investment strategy is evident in their financial statements. In 2022, they invested over €1.1 billion in acquisitions, including Lagardere shares, MultiChoice, and strategic acquisitions by Canal+ and Havas. This aggressive investment strategy signifies their long-term vision and willingness to forgo short-term profits to build a content empire for the future.

But Vivendi's strategy isn't just about buying growth. They are keenly aware of the need for integration and collaboration across their diverse portfolio of businesses. The recent creation of a new management board and executive committee, representing all their businesses, signals a shift towards greater integration and synergy. Vivendi aims to leverage its combined expertise in media, communication, and entertainment to create a "winning positioning" capable of delivering unique value to consumers.

This focus on integration is already yielding results. Havas, for example, collaborated with Editis, Canal+, Gameloft, and Prisma Media on a project promoting energy sobriety in France, demonstrating the potential for cross-business collaboration. This example highlights Vivendi's recognition that their diverse portfolio of businesses, when working in concert, can create a powerful ecosystem capable of delivering impactful and engaging content across multiple platforms.

While Vivendi's short-term focus remains on resolving the Telecom Italia and Lagardere situations, their long-term vision is clear: they are building a global content giant capable of competing with the best in the world. This ambition, coupled with their aggressive investment strategy and commitment to integration, suggests that Vivendi is a company to watch in the years to come. If their strategy pays off, we could be witnessing the birth of the next Netflix, but with a uniquely European flavor.

"Fun Fact: Vivendi owns Canal+, which holds the rights to broadcast Formula 1 races in France. The viewership of Formula 1 has skyrocketed in recent years, partly thanks to the success of the Netflix docuseries "Drive to Survive." This unexpected synergy highlights the unpredictable ways in which Vivendi's diverse holdings can complement each other."