Pretty much the merger of the year this one with the two main commercial entities RTL Netherlands and Talpa Network forming a joint venture. There is obviously no mentioning of any amounts involved in this deal, but RTL will get 70% of the shares of the company and Talpa 30%. It will be led by RTL CEO Sven Sauvé while Dutch media mogul John de Mol will remain as a shareholder and producer of new formats. In this way, De Mol can devote himself entirely to developing and selling formats. His Talpa Concepts and Talpa Entertainment Productions are not part of the deal.
Although it is still pretty far away before this is all settled – obviously ‘Brussels’ and the Netherlands Authority for Consumers and Markets will have to approve – so we’re talking mid-2022 at the earliest. The plans of RTL and Talpa fit in a trend of scaling up and consolidation. In recent years there have been consolidations in the radio marketplace in the Netherlands and for TV we already saw the acquisition of BrandDeli by RTL and the subsequent launch of AdAlliance. The story is always that with these consolidations a stronger national supply of advertising can be achieved with advantages for advertisers, but so far previous mergers have not led to these necessary quality improvements and innovation. All in all, the reactions to this ‘breaking news’ are more or less the same: advertisers are worried about what happens to the choice in channels and quality so they can reach their target groups as specifically as possible. This could be endangered by this consolidation as it creates a semi-monopoly with a shrinking supply. Agencies also fear the ‘power bloc’ on TV when the two actually merge.
On the other hand, the positive side of the merger between RTL and Talpa is that the attention for local content is increasing. Joining forces should lead to more investments, including in content on Videoland – in their battle against Netflix – but also on the linear channels. And that offers new opportunities for advertisers. These kinds of cooperations are most likely the only way for local commercial parties to play a role and avoid advertising euros being swallowed by the big international media tech parties. RTL and Talpa may also be able to compete with foreign parties when it comes to sports rights.
All Response Media viewpoint
Nevertheless, we also see negative effects of this merger. It is clear that the choice for advertisers is severely limited, which is not desirable. An unhealthy power bloc is created, and the new party has a disproportionately dominant position in this way. The consolidation also leads to a harmonization of commercial policy, which may result in a disproportionate price increase for advertisers which is indeed very worrying. Year-on-year double-digit price increases could eventually mean that television will price itself out of the market in the Netherlands. And as a result, the opposite effect occurs and makes the use of digital, and in particular that of the American tech giants, even more interesting.•
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