‘TV sales house mergers will encourage short-term deals’

BroadcastingTV buyers warn of ill-effects of TV ad sales mergers mooted by broadcasters. By Camille Alarcon

TV buyers warn a consolidation of ad sales teams among TV broadcasters could lead to more short-term deals being brokered, and also raises concerns of reduced competition.

The comments come in reaction to news that broadcasters are in discussions to merge their advertising sales teams in anticipation of the relaxation of the Contract Rights Renewal (CRR) mechanism.

Reports emerged last week that BSkyB and Channel 4 are in talks to consolidate their ad sales team in a major cost saving strategy. But such discussions are believed to be much more widespread and include other broadcasters such as Five.

Many TV buyers believe that a consolidation is more than likely, but there is concern that it will lead to a stifling of competition to the detriment of clients.

One buyer fears that sales team mergers will lead to “more consolidation, and then the danger is you will end up with only two sales houses competing against each other”.

Starcom trading director Chris Locke adds that if three sales houses emerge, media agencies will become “more promiscuous” in terms of which sales houses they trade with. “They will trade for the quarter rather than a year and may want to test the waters initially,” he says.

IDS, the sales house owned by Virgin Media TV, sells advertising for the VMtv channels, UKTV, Setanta Sports and Virgin on Demand. Viacom Brand Solutions is the sales house for MTV Networks UK.

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