One Type Of Ad-Supported Video Screen -- From Just One Company?

A company in a particular “screen” industry might hold an 88% market share where video advertisers buy in. Not in broadcast, cable, syndication, or digital -- that’s for sure.

It could be in cinema advertising. A proposed deal between National CineMedia (20,000 screens) and Screenvision (14,000) will do just that. Those two companies sell movie screen inventory to advertisers.

Cinema advertising has been a growing business, highly touted for its efforts to have captured, engaged consumers rarely able to avoid commercial avoidance.

Turns out that the competition between National CineMedia and Screenvision has been fierce -- crazily so. A lawsuit from the Department of Justice against the $375 million merger, citing antitrust issues, says the deal is all about controlling pricing. It talks to NCM’s concerns about aggressive pricing from Screenvision’s “undercutting [NCM’s] pricing by 50% (or more) [as] a direct threat to [NCM’s] business model.”

While TV networks will discount some against competitors -- on occasion -- rarely do TV networks compete in such a drastic way.

And it gets worse, according to the DOJ. In a Hollywood Reporter article, one NCM executive is quoted: “We need to buy [Screenvision] before either us or [Screenvision] does a stupid deal.”

Bill Baer, assistant attorney general at the Justice Department’s Antitrust Division, said:  "This merger to monopoly is exactly the type of transaction the antitrust laws were designed to prohibit. If this deal is allowed to proceed, the benefits of competition will be lost, depriving theaters and advertisers of options for cinema advertising network services and risking higher prices to movie-goers."

You want to blame media fragmentation? You can. New troubled digital video platforms might have their own monetization issues. But the likelihood of two companies owning nearly 90% is unthinkable.

Video advertisers, of course, have other options when it comes to screens. No doubt that would be the pressing point of company executives in support of the deal -- that and perhaps improved business metrics for those advertisers who participate.

It wasn’t all that long ago three major TV networks controlled virtually all video advertising dollars.

But this is not exactly one company having a 90% market share. Should that matter? Someone might say if perhaps one big marketer has no other places to conduct business, then we have a problem



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