Zee-Sony combined will have too much power in negotiating ad deals: Sujata Dwibedy
Dwibedy, Group Trading Director, Amplifi India, dentsu International, helps us understand the possible implications of Zee-Sony merger on the industry
The recent merger of Zee Entertainment Enterprises with Sony Pictures Networks is expected to create a TV broadcasting behemoth with 75 TV channels across general entertainment, movie, kids, sports, and regional genres. The combined entity will have a 25-30% share of the total TV viewership in India. In digital, it will have two fast-growing over the top platforms, ZEE5 and SonyLIV. The biggest impact of the merger, according to industry experts, will be on the Hindi GEC and movie genres, which collectively control Rs 6,000-7,500 crore of total TV ad spends.
With such far-reaching implications, the deal is undoubtedly expected to change the dynamics of the industry. We spoke to Sujata Dwibedy, Group Trading Director, Amplifi India, dentsu International, to understand its possible impact on the sector.
Edited excerpts of the conversation:
This is the first time two big broadcast players are merging to create a behemoth. Will Zee-Sony merger give too much power to the combined entity when it comes to negotiating ad deals?
Yes, it would. The two networks complement each other. While Zee is a powerhouse across urban & rural and among female audiences, Sony works exceedingly well with the urban modern audiences.
Zee has a large regional network and so does Sony, though only in some markets. Both have strong FTA channels and OTT platforms, and are doing well in the movie genre. With the merger, they could become the second largest OTT player with a huge regional content library. Also, Zee has a strong international presence (more than 170 countries) and Sony is strong in terms of sports, which Zee can leverage.
The merger has taken the market share of the networks to the highest. Overall, the alliance has made them a giant network in the country.
With the consolidation, there will be two large players in the market— Star-Disney and Zee-Sony. Will the concentration of large market shares with the two big players change the dynamics of the TV ad business?
Let’s not forget that Viacom is also huge and has Reliance’s backing. They also have a large network strength with Network 18 and Jio. It would be more of a triopoly at a national level, and if we add Sun Network too, there would be four key networks. Definately not the best scenario for agencies and advertisers, because it is a demand-supply game, and this would create an imbalance in the market. While the market share will rest with these four networks, the limitations on inventory will lead to business across other channels and networks. But good content will always drive viewership. Hence, there will always be business for all.
Is consolidation on the platform side good or bad for media agencies and advertisers and why?
It is both good and bad. Good because we don’t have to go to multiple partners; we can look at consolidating the budgets with one or two networks and do the deals at a network level. It becomes a one-stop shop for TV or OTT and TV+ OTT, along with the mix of genres. However, there could be an issue because they may command the rates at a certain level, which may not be agreeable by us. Also, the inventory is limited so chances of poor servicing is also high. Further, guaranteed deliveries for media agencies & advertisers might suffer, and large events might have monopolistic advantages for the broadcasters. Concern could also arise on the quality of servicing.
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