Telenet takeover of De Vijver Media may mean more content-distribution mergers coming up

Thursday 8 March 2018 | 12:32 CET | Market Commentary

Telenet has agreed to increase its stake in De Vijver Media from 50 to 100 percent, giving it control of the SBS Belgium commercial channels and production house Woestijnvis. At the same time it's forming a joint venture to set up an ad sales company with the publisher met Mediahuis, in order to promote cross-media advertising. Telenet is expanding in local content and the ad business, raising the question whether other companies in the Liberty Global portfolio will follow the example. 

De Vijver Media gives Telenet the channels Vier, Vijf and Zes as well as its own content production studio - a form of vertical integration. This is a risky move as it increases the reliance on advertising revenue, compared to its current profile of largely a subscription-based business. Furthermore, the traditional TV market is a long but slow downward fall. More positive is the expansion in local content. This positions Telenet as a potential partner for the internet majors (Netflix, Amazon, YouTube) when sooner or later they come looking for local productions

The deal raises again the question of whether TV distributors and content producers should mere. The Comcast/NBCU combination has held up and may soon add Sky to its stable, while AT&T is pursuing a merger with Time Warner. However, Danish operator TDC saw its proposed merger with the Modern Times Group torpedoed by a takeover bid from Macquarie and a number of institutional investors. The new owners apparently saw nothing promising in the plan to merge distribution and content and prefer instead to split up TDC. 

The Netherlands is ripe for such a merger, at least on paper. A major media cluster could be created from the merger of (Telenet's stepsister), Talpa (owner of SBS Netherlands) and possibly TMG (owned by Mediahuis). VodafoneZiggo may still have its hands full with integrating the company and making the transition to all-digital services, but both Talpa and Mediahuis believe in the power of cross-media. And SBS, as number three on the Dutch broadcast market after the NPO and RTL, could only profit. 

Another possible combination is KPN with Fox. This would give KPN a durable link to the Eredivisie football and other sports, as well access to an open channel in need of an impulse. 

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