The official announcement of the Zee-Sony merger termination rocked the media industry at the beginning of the week, and most advertising experts are of the view that in the long run, the merger falling through will not be good for either player, or even the industry.
Many advertising experts feel the merger would have been beneficial to both, the broadcasters and the industry. However, the fallout should be a cause of concern for advertisers in the long term. Particularly given the fact that a new media mogul will emerge with Reliance Industries being in talks with Walt Disney Co.'sCEO Bob Iger to join forces with the Disney’s Star franchise. The Zee-Sony merger could have proven to be a rival platform to brands seeking a national footprint. Its failure will leave advertisers with no viable alternative to Reliance+Disney in the future.
Dentsu South Asia CEO Harsha Razdan feels that going forward it is expected to become a lopsided industry. “Monopoly is never right for the consumer in any industry. Three to four players are always best for everyone. Otherwise it becomes a sellers market,” Razdan said.
However, Razdan also feels that the advertisers could breathe a sigh of relief, at least for now, post the Sony-Zee merger fallout. “If you look at the last year-and-a-half, a lot of decisions have gone in limbo because of the ongoing merger. From the advertiser's perspective it was kind of frustrating to see no action. So it might be a little bit of a sigh of relief for them. Now we will see both companies getting on with their life,” the Dentsu South Asia CEO said.
Media expert and author Vanita Kohli Khandekar is particularly not happy about the fallout and is of the view that both entities were superbly complimentary to each other. She sees no short term impact on their respective business but definitely an impact on the industry and advertisers moving forward. She said “advertisers’ negotiating power will go down,” with only one player emerging and owing almost one third of the market in the near future.
“A merger would have been positive for revenues across the top media conglomerates,” said media expert Paritosh Joshi. “I see big conglomerates in the media space not necessarily as mutual substitutes but as a shrinking of manoeuvring room for buyers of media inventory. The fewer the sellers, the pricier is the inventory,” he added.
Although, for now he too feels advertisers will breath a sigh of relief with Sony-Zee merger falling apart. “This consolidation would have led to the creation of a massive pool of high-quality and indispensable advertising inventory, and therefore, higher spot rates.”
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