Archive for the ‘Television’ Category

Mergers and TV companies: is media like cheese?

December 22, 2009

Last week two Spanish broadcasters, Telecinco and Cuatro, announced that they will merge. It seems that other two, Antena 3 and La Sexta will do the same quite soon. Each new audiovisual group will have between 21 percent and 23 percent of the audience market share (the legal threshold is 27 percent).

Telecinco’s main shareholder is Silvio Berlusconi, while Cuatro is owned by PRISA, a media company closely linked to the Spanish Socialist Party. On the other hand, Antena 3 has a right wing orientation and La Sexta has the opposite position.

During the last days, managers of the four TV companies concerned said that each channel will preserve its identity. But… is media like cheese? A cheese company can produce Gruyere, Emmetal, Gorgonzola or Roquefort: different options for different tastes. But can we apply this model to media? Will the journalists be happy if they know that the new owner is only interested in profits because he has not a pourpose of making a positive impact on society? Will the company keep the standards of quality and innovation if their most creative people are not motivated? The future will give us the right answers.

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2010: A Year of Mergers in the Spanish TV Market?

December 15, 2009

2009 has been a year of dramatic changes in the Spanish television market: a new legal framework, a decrease of advertising income close to 24%, and a more fragmented audience. Other issues have been less innovative: during the last 12 months we have seen again several controversies about the quality of programming and about the role of the public television. Also, in spite of the launching of new entertainment substitutes, TV consumption remains high.
Spanish television companies are feeling the pinch because of both the advertising decline and the launching of new channels. Only two operators -Telecinco and Antena 3- will be profitable in 2010 and their margins probably will be below 12% of their income.
In this context, mergers and acquisitions seem inevitable: a majority of competitors are not profitable and the law allows consolidation of companies with a limit of 27% of audience’s market share.
What are the barriers for implementing such deals? Firstly, the small TV companies have big debts. And secondly, two merged companies only can have one boss: that last fact will be the main obstacle for consolidation of companies in the Spanish TV market next year.