Advertisers were never too excited about the Zee-Sony merger, say media planners
Advertisers were never too excited about the merger and media buying firms anticipated limited ad revenue boost, say industry executives.
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The $10 billion Zee-Sony merger could have created a formidable media giant but media planners and experts suggest it might not have made a significant impact on advertisers or increased ad revenues for the company.
“Zee's strength in regional markets like Marathi, Bengali, and South, combined with Sony's broader appeal to the mainstream audience, would have formed a potent combination, however that would have only enriched their content portfolio. In the current media environment, characterized by a shift to digital and a soft TV market, the potential revenue impact of the merger is questionable,”said a media expert who did not wish to be named.
A soft market is one where demand is decreasing or buyers are exiting the market.
According to planners, finite advertising budgets and sports channels dominating revenue streams, the merger might not have significantly increased overall ad revenue for Zee and Sony.
The overall shifts in popularity of TV as a medium is another huge factor why advertisers were never too excited about the merger.
“Gone are the days when TV would see year-on-year growth of 15-25 percent. So while the merger had the potential to impact the company stocks, valuations, content capacities and even distribution revenues but it never had the promise of changing ad dynamics,” said another media planner.
It is also important to understand that, at this point there is another big media merger in the play. Experts feared that if both happened together it would create a duopoly and the combination of a soft market and a doubly is never an ideal one.
“When there is a duopoly and the market is buoyant then it will add to their revenue streams, but the way it is now it would have created a buyer’s market where advertisers gain negotiating power, dictating terms to TV channels and that is never ideal,” said the above mentioned buyer from a large media investments firm with several big ticket clients.
If the merger happened in a buyout market, the new Zee-Sony entity could have given a hard time to the advertisers.
However, the current scenario is different.
“People are grappling with revenue issues, particularly in the TV genre. Maintaining a foothold in the market and securing a share of the wallet within the television landscape is proving to be a struggle. The fallout of the merger has not significantly impacted the market; instead, it continues business as usual,” they said.
