Private equity and venture capital firms invested $370 million into streaming media companies worldwide in 2022, down 73% from $1.38 billion of investments in 2021, S&P Global Market Intelligence data shows.

The number of private equity-backed transactions involving companies that provide video streaming service, audio streaming and television shows fell to 29 from 35 during the period.

So far in 2023, there have only been three such deals announced or completed. These were funding rounds that involved Rarefied Atmosphere Inc. and Bluestack Systems Inc. in February and Sensei Ltd. in April.

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Texas-based Rarefied Atmosphere, a streaming platform for businesses, raised $65 million from investors including Valor Management Corp., Sageview Capital LP and S3 Ventures.

California's Bluestack raised an undisclosed amount of funding with new investor NTT Docomo Ventures Inc. from Japan and South Korea's Megazone Cloud Corp. Sensei raised $18 million from a group of investors including BITKRAFT Ventures Management LLC, HashKey Capital, Lattice Capital and M13 Ventures Management LLC.

The $83 million in investments year to date through May 15 fell far below the $193.1 million that private equity firms poured into the streaming sector in the first quarter of 2022 and could mean a further year-over-year decline for 2023.

Many streamers today face growth and profitability challenges amid inflation and rising competition, according to a report from Kagan, a media research group within Market Intelligence. "In the post-pandemic world, some subscription video on demand players now face customer retention issues and often incur operating losses," the report said, adding that the streaming industry is shifting out of growth mode to target profitability.

Deal activity in the global streaming industry last peaked in 2019 with the completion of two blockbuster deals each worth at least $3 billion. In one transaction, the largest in at least the last five years, Bain Capital Pvt. Equity LP acquired 60% of the UK's The Kantar Group Ltd. from WPP PLC for $3.33 billion.

China had the second-largest deal, the completion of a $3 billion funding round for Shanghai Youdu Broadband Technology Co. Ltd. with investors including Tencent Holdings Ltd., Boyu Capital Consultancy Co. Ltd., Sequoia China Investment Management LLP, Temasek Holdings (Pvt.) Ltd. and Yunfeng Capital.

Asia-Pacific region dominates

Streaming providers based in Asia-Pacific have received the largest chunk of private equity and venture capital in the last five years. The region accounted for over 50% of the $10.72 billion of investments in the sector globally since 2019.