Logo of Phnom Penh Post newspaper Phnom Penh Post - Local TV advertising giants poised to merge

Local TV advertising giants poised to merge

Cambodian children watch television in their home in Phnom Penh.
Cambodian children watch television in their home in Phnom Penh. Pha Lina

Local TV advertising giants poised to merge

Two of the country’s biggest television advertising studios have announced plans to merge and pool resources in a move expected to raise the bar on the domestic production of high-quality TV commercials for the Kingdom’s airwaves.

Under a deal expected to be concluded next week, Cambodia Broadcasting Service (CBS), a subsidiary of business tycoon Kith Meng’s Royal Group, will absorb TV advertising company Legend Tiger Investment Co Ltd and merge its operations with its own television commercial production arm. The merger would create the nation’s largest and best equipped television advertising production facility.

Glenn Ala, head of TVC operations for CBS, said that until now the two companies have operated as direct competitors vying for the increasing demand for television commercial production. Their combined resources would be pooled under a new shareholder agreement in which Legend Tiger “becomes a subsidiary, owned and operated by CBS”.

“The subsidiary will have two stakeholders, Kith Meng as majority shareholder and Bou Panha [as minority shareholder],” he said, referring to the current executive producer for Legend Tiger.

He added that a general manager would be appointed by CBS to run the company after the merger is finalised.

While Ala declined to disclose any financial figures or the amount of assets held by each party, he said the deal was made possible by the rising fortunes of CBS’ television commercial production arm.

“CBS’s TVC production department had a slow start but has recently grown in strength and profitability, primarily due to the infusion of skills and talents sourced both locally and internationally,” he said, adding that the company had to build up its network and brand image.

“Now with the merger, things can only get better because we combine the creative teams of both, and get the added benefits of Legend Tiger’s experience and network, [plus] CBS’ talents and resources,” he added.

CBS owns and operates three of the Kingdom’s biggest entertainment and news channels – CTN, CNC and MyTV – and raked in an estimated $20 million in advertising revenue in 2015. Meanwhile, Tiger Legend boasts a roster of high-profile clients that include CIMB Bank, Axiata, Cellcard and Cambodia Beer.

According to Ala, the consolidated TV commercial production facility would look to focus on keeping local advertising money from going to production houses in Thailand, Vietnam and the Philippines.

“We will strive to provide international quality productions and try to keep the ad production dollars from leaving the country,” he said. “And with the backing of the largest media company in Cambodia, we will be able to narrow the gap even further between brands and TV audiences through branded content.”

Julian Rake, managing director of local public relations and digital media firm Quantum Media, said that while there was no doubt that local demand for high-quality production of commercials was on the rise, there was a “disconnect” between the rates television stations were charging and prime time slots.

“There is a bit of a disconnect in [TV commercials] because advertising rates are so cheap here on Cambodian television stations with such a proliferation of different channels,” he said. “Marketing directors must sometimes wonder why they would pay top dollar for high-end production only to place their ads in such cheap time slots.”

He added that the low cost for prime time slots creates a disincentive for advertisers to invest heavily in high-quality commercial production.“Of course a big production house can offer its clients economies of scale and do quality work at a lower price, but there is a finite amount of that work around,” Rake said.

He added that it would be difficult for a production house to survive purely on making TV commercials without tapping into additional production streams such as “drama or reality shows”.

MOST VIEWED

  • Would you like fries with that? US burger chain makes Phnom Penh debut

    California-based The Habit Burger Grill restaurant chain is all set to serve up a delicious array of charbroiled burgers and sides at its newest international location in the centre of Phnom Penh. The Habit is “renowned for its award-winning Charburgers grilled over an open flame,

  • Angkor provides ‘valuable’ water storage

    The Apsara National Authority (ANA) has stored millions of cubic metres of water at reservoirs in the Angkor area after Cambodia experienced a series of rainstorms over the last few days. The storing of the water, besides serving temple conservation, will also be used to

  • Banteay Meanchey floods kill one more as death toll reaches 15

    As floodwaters start to recede in Pursat, Battambang and Pailin provinces and Phnom Penh, Banteay Meanchey continues to bear the brunt as one more person was killed on Monday, bringing the total number of flood-related deaths to 15 in the province this month. Banteay Meanchey provincial

  • Floods prompt evacuations in Kampong Speu

    Rain-induced floods and water flowing from Kampong Speu province have submerged the houses of 1,527 families living close to the Prek Thnot River in Spean Thma, Tien, Kong Noy and Roluos communes in Phnom Penh’s Dangkor district, according to data from local authorities. Spean Thma

  • Serving coffee with a side of robots

    The eye-catching glass building surrounded by greenery at the intersection of Streets 371 and 2002 in Phnom Penh’s Sen Sok district is more than just another coffee shop where you can while away a few hours. UrHobby House cafe is filled with robots and characters from

  • Banteay Meanchey flood victims receive aid

    Prime Minister Hun Sen on Wednesday provided aid to more than 10,000 families affected by flooding in Banteay Meanchey province’s Mongkol Borei district and offered his condolences to the 18 victims who drowned in the province over the past week. He said flooding had occured in