Friday, July 18, 2014

What a Fox-Time Warner Merger May Mean for Advertisers

A 21st Century Fox acquisition of Time Warner would create a high concentration of the all-important 18-to-49 TV viewing demographic within one media conglomerate, giving the joined entity significant pricing power over advertisers, according to AdAge.

The new company would command 27% of total-day TV viewership across the top 15 cable networks, and 24% of it among the 18-to-49 demo, said Kannan Venkateshwar, analyst at Barclays, in a research note.

Rupert Murdoch's 21st Century Fox confirmed on Wednesday that it made an offer to buy Time Warner for about $80 billion. Its offer was rebuffed, but observers are confident that Mr. Murdoch can have his prize if he really wants it, citing previous acquisitions such as Dow Jones that came only after a fight, and an enriched bid.

Putting a quarter of the demographic in one company's hands could create new pressure for ad buyers to themselves consolidate further.

"Advertisers today are looking more and more for strategic partners that can do enough for them and put together a meaningful marketing plan rather that doing bits and piece with a bunch of partners," said Bob Pittman, chairman and CEO, Clear Channel. "Scale means a lot in this new world. You want to have your best creative discussions with those who can deliver the biggest scale. The more assets a partner can bring to the table the more powerful it can be."

No comments:

Post a Comment