In the first quarter, the value of merger and acquisition deals in the U.S. entertainment, media, and communications sectors totaled $10.4 billion, the lowest value since before 2014.That s the conclusion from PwC s US Entertainment, Media & Communications EMC Deal Insights report.

The decline in megadeal amounts started in the second half of 2015.In the two big deals, Dalian Wanda bought a majority stake in Legendary Pictures for an undisclosed amount, and Verizon Communications acquired XO Communications.But PwC said it remains optimistic that there will be an uptick in activity in coming quarters, with recent regulatory clearance for previously announced cable megadeals and the overall macroeconomic environment stabilizing after a volatile start in 2016.Deals in the sector are being driven by industry innovation in the highly dynamic digital ecosystem.

Changing consumer demands coupled with rapid technological advancement make it essential for deal makers to seek targets that help deliver the connected experiences consumers want.In film and content, deals were led by film production and distribution studio deals.

Chinese and Qatari companies increased their acquisitions, and PwC expects more foreign buyers to come forward in the coming quarters.

Deal activity continued to be dominated by Internet media lifestyle and entertainment content properties targeting consumers rather than business-to-business users.In advertising and marketing, deal volumes rebounded from 45 in Q4 2015 to 58 in Q1 2016.

PwC expects ad tech to grow more investment and M activity.

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