What does Viacom's acquisition of C5 mean for advertisers?
Last week Viacom, which owns MTV, Nickelodeon and Comedy Central, bought Channel 5 for £450m, ending months of speculation regarding who would step in to meet Richard Desmond's ambitious £700m price tag.
Here Pippa Glucklich, co-CEO of Starcom MediaVest Group gives her views on what the acquisition could mean for advertisers.
So what’s in it for Viacom? In the linear world of TV share of revenue, Channel 5 is the smallest player. But given TV represents such a high percentage of overall media investment, Channel 5 is certainly top 10 which suddenly makes it a more interesting purchase (even with a £450m price tag!).
Without doubt the Channel 5 sales operation has reinvented itself since it was acquired by Richard Desmond in 2007 and has consistently delivered impressive growth every year. It has also been well documented that Channel 5 has created a pretty unique trading approach that will provide Viacom with a number of commercial opportunities to explore; something Viacom was a great exponent of historically.
In light of that, how will Viacom choose to sell Channel 5’s inventory?
Sky Media, which already represents Viacom sales, would become the UK’s second largest TV sales house and will undoubtedly have the broadest spectrum of programming and audiences as a result.
Historically, Sky has been viewed as a destination for male audiences due to its strong sport offering but could now offer clients a terrestrial audience through integrating the Channel 5 revenue and audience into its existing market mechanic - creating an efficient route to 1m+ terrestrial audiences.
It is also important to remind ourselves that BSkyB’s business model is very much subscription based (90/10) so a Sky Media with or without Viacom will still be a force to be reckoned with.
In our view, competition in the market is always healthy and as such a standalone Viacom would provide a great platform to reach 16-34 Adults and young families (Big Brother, Nickelodeon, MTV) - something advertisers would welcome. That said, it’s arguable that Viacom could have a real challenge to step out from the shadows of the big three and command additional share.
There is no clarity as yet on how this will pan out, so it is all to play for and we will watch carefully with interest - any change (especially of this scale) naturally creates exciting opportunities for us and our clients.