April 2015 6 World t 4I6.366.6588 f 4I6.363.9726 35 Britain Street, Toronto, Ontario, Canada M5A 1R7 distribution@breakthroughentertainment.com WWW.BREAKTHROUGHENTERTAINMENT.COM JOIN US IN THE CANADIAN PAVILLION BOOTH: P-1 A.0 2015 The Battle of Media Giants Since politicians around the world allowed for the creation of media giants with no regulators in between, the battle of the titans is now raging in the U.K., pitting Omnicom, the world’s second biggest advertising group, against Channel 5, owned by American media giant Viacom, which last year acquired Channel 5 for £450 million (U.S.$693 million). After Omnicom pulled some £30million of its clients budgets from Channel 5 and moved it to ITV, the channel fired back by complaining directly to the advertising group clients. Reportedly, Omnicom pulled out of Channel 5 not because of the channel’s low performance, but to satisfy a commitment it made to ITV. In a letter to Omnicom’s clients, Channel 5’s Russ Belcher wrote that his channel’s airtime rates were 15 percent cheaper than those last year and that ITV rates are expected to increase by 20 percent this year. In addition, Channel 5 is now getting good ratings even with younger audiences, which are prized by advertisers. Overall, Channel 5 takes a share of all the U.K.’s TV viewing that is greater than 10 percent. Before pulling out, Omnicom was expected to invest £50 million with Channel 5, bringing thestationtogenerateaprojected £70 million profit against past losses of £48 million. This is the latest spat between agencies and broadcasters in the U.K. In 2013, WWP pulled all of its clients’ advertising from the U.K.’s Channel 4. WWP controls 35 percent of the U.K.’s TV ad market share, while Omnicom and Publicis control 14 percent each. Further concentration was averted when the planned £35 billion merger between Omnicom and Publicis was not approved. Among the U.K. broadcasters, ITV has 48 percent of the ad market (£1,852 million), Channel 4 has 24.1 percent (£934 million), Sky Media 18.65 percent (£724 million) and Channel 5 has 8.65 percent (£336 million). Last December, Thomas Middelhoff, 61, the former Bertelsmann chief, was found guilty of 27 counts of embezzlement and three counts of tax evasion. About 10 years earlier, another Thomas from another large German media company, Thomas Haffa, now 63, founder of EM.TV, was fined 1.2 million euro for misleading his company’s shareholders. In the year 2000, EM.TV’s capitalization was 10 billion euro. Two years later it dropped to one billion euro, and in 2008 its library was acquired by Studio 100. In the same year, the company changed its name to em sport media (now Constantin Medien). Before the fall, Haffa became a front cover story in the May 10, 1999 issue of BusinessWeek. Before that, in 2002, another large media conglomerate, the Kirch Group, collapsed due to accumulated debts of 6.5 billion euro, Germany’s biggest postwar bankruptcy. Its founder, Leo Kirch, died in 2011, survived by his son, Thomas. “Thomas” Not a Promising Omen for German Media Groups (Continued from Page 4) (Continued on Page 10)
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