Consolidated streamers now need to prove their value to advertisers

The biggest media merger of the century so far is in limbo, as a U.S. antitrust lawsuit threatens to delay Paramount Skydance’s $110 billion takeover of Warner Bros. Discovery into next year. But even with this major roadblock, the consolidation trend looks increasingly undeniable and existential for broadcasters and streamers alike, from the U.S. to the U.K., Africa and Southeast Asia.

As they face off against the likes of Netflix and Prime Video on one side, and increasingly YouTube and even Instagram on the other, scale has become an imperative for the rest of the pack. Comcast, RTL and Viu, to name but a few, have pursued everything from spin-offs to acquisitions to streaming bundles in the past year.

For consumers, joining forces can help address concerns around subscription fatigue and fragmentation. For advertisers, however, the benefits are less obvious. The race is now on to prove that consolidation will yield simpler buying, better measurement and greater value.

“Buyers can achieve larger audiences with fewer deals, more consistent measurement and better operational efficiency. … Some of these consolidations like Fox and Roku synergistically marry ad tech with content, supporting more commercialization of content,” said Valerie Davis, U.S. CEO at Croud.

“The largest area of impact will be when we plan, negotiate and buy a holistic consumer experience across all their properties,” Davis added.

But scale alone won’t necessarily persuade advertisers to spend more. “Unless the merged platform delivers greater value through better measurement, easier buying or demonstrably stronger outcomes, I’m not sure advertisers will be willing to pay materially more,” Davis said, adding that she didn’t think scale “was ever the barrier.”

Other experts who spoke to The Current agreed. “Advertisers already know consumers are spending time with connected TV (CTV). … Consolidation only matters if it reduces complexity for advertisers. If I still have to navigate multiple sales teams, inconsistent measurement and disconnected data, then nothing has really changed,” said Randy Gudiel, senior vice president media director at Orci.

Indeed, based on recent results, advertisers don’t seem deterred by this supposed lack of scale that media owners are trying to address. Fox, Paramount Skydance and Disney all reported double-digit gains in upfront ad commitments in the U.S.

The picture is different in Europe. Sky, ITV and RTL want scale to compete more effectively for audiences who are shifting toward the global streaming giants.

“There is a defensive element to these mergers,” said Rory Gooderick, research manager at Ampere Analysis. Disney+ recently said it would triple the number of its local originals outside the U.S. to improve retention. Against this level of financial firepower, European broadcasters like RTL see consolidation as “necessary” to avoid global players dominating the European markets, said RTL Group CEO Clément Schwebig recently. 

RTL’s acquisition of Comcast’s Sky Deutschland, which closed in June, means that the German group can now reach almost 90% of the German population, Schwebig said. RTL+, with 12.4 million subscribers, is now the third-largest streamer in German-speaking Europe, behind Netflix and Amazon Prime.

Competing for attention

Experts said this wave of consolidation isn’t primarily driven by a desire to compete with the likes of YouTube and Meta, given that social video and premium TV fulfill fundamentally different roles on a media plan.

Still, the rise of social video has changed the competitive landscape for premium video, fragmenting audience attention and shifting a growing share of advertising budgets toward user generated content and algorithm-driven platforms like YouTube, Instagram and TikTok.

To future-proof their appeal to advertisers, a consolidated streamer would need to do more than aggregate audiences. “It would need to deliver the same level of agility, targeting, measurement and creative iteration that makes social so effective, while preserving the premium attention that makes CTV valuable in the first place,” Davis said.

On the content side, some changes are already underway. “What we are seeing is an increased willingness from streamers and broadcasters to mirror the viewing experience of TikTok or YouTube contained within their own platforms,” Gooderick said. That includes NBCUniversal’s Peacock investing in microdramas, as well as partnerships such as Disney+ partnering with TikTok to bring creator-led content to its platform.

On the tech side, the bigger opportunity is making premium video a stronger proposition within the overall video market.

“Better audience capability, simpler buying and stronger measurement would all help advertisers invest with greater confidence. If that happens, premium video is in a much stronger position to compete for future investment that might otherwise flow into YouTube, Meta or TikTok,” said Nick Tong, managing partner, media and data at Mediaplus UK.

Experts told The Current that their main gripe with CTV remains effective measurement. “We believe the bigger barriers were the lack of consistent planning and measurement solutions. Today, more integrated and seamless toolsets are available, making it much easier for advertisers to invest in CTV at scale,” said Michael Beuth, managing director at Mediaplus Germany.

“Premium inventory should command a premium. The important question is whether advertisers can clearly see why they’re paying for it,” Tong added.

Asking the right question about prices

Buyers don’t expect premium video inventory to get cheaper. Consolidation tends to increase pricing power by reducing the number of sellers, while fewer players could also strengthen major media groups and reduce competition for programming, Gooderick said.

But higher prices do not necessarily mean worse value for advertisers. “I think we’re asking the wrong question. Advertisers rarely ask whether media is cheap or expensive. They ask whether it’s worth the investment … because they’re purchasing greater confidence in the outcome, not simply buying impressions,” Gudiel said.

What buyers do hope is that this wave of consolidation will bring bigger value for advertisers, not just bigger companies.

“Ultimately, the conversation should shift from cost to value. That’s a much healthier place for both advertisers and publishers,” Gudiel said.