The US-based media conglomerate Walt Disney recently negotiated a barter deal with its long time rivals News Corp and NBC Universal under which it took an equity stake in their fast-growing web site Hulu.com, in return for providing free Disney content to be aired on the web site. Hulu.com primarily airs movies and episodes of film shows.
The deal was meant to help Walt Disney reach a larger audience outside of television and in the digital space and Hulu.com in return would get the much needed premium content for its users. This practice known as media barter is a common phenomenon in the international markets. While the Walt Disney-Hulu.com deal is rather straight forward, companies even buy and sell merchandise and products that may not have any direct connect with their prime business in such deals.
It is estimated that globally the size of this business is nearly $ 3 billion and the US-based Active International is the largest player managing around $ 1 billion worth of media barter business annually. Besides this, Orion Trading, which was earlier known as Magna Global Trading owned by global marketing communications company Interpublicis, is also one of the significant players in the media barter space. Globally, the concept of media barter is at least a decade old.
Under media barter deals, companies essentially barter their under-performing or nor-core assets or inventories with media buyers or media owners in return for advertising and marketing. The media owner on receiving the goods can either distribute them to their consumers through marketing promotions or capitalize them by selling them to relevant distributors.
The phenomenon, however, has yet to take off in a meaningful way here in India. With the country's largest marketing communications group WPP entering the space, through its media buying network Group M, the game looks set to change.
GroupM recently floated a new agency called The Midas Exchange whose primary mandate is to execute media barter deals. A section of the industry feels with markets still struggling with economic challenges, media barters will be a win-win proposition for the buyers and the sellers.
Interestingly, globally while many companies are left with unsold inventories or products, the media owners are also interested in getting into the barter deals because they are facing a drastic decline in newspaper, radio, television and billboard advertising.
According to WPP, The Midas Exchange was formed at the request..
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