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JCDecaux buys Titan UK out of Administration

January 20, 2010

JCDecaux, one of the global out-of-home (OOH) market leaders, acquired UK operator Titan Outdoor out of administration for an undisclosed sum.

Titan Outdoor, formerly a UK leader, was particularly active in transit formats. Parent company Titan Worldwide further operates on US and Canada markets. The majority of Titan's retail and rail inventory is to be taken over by JCDecaux but no specific details have been divulged at this stage. Titan Worlwide's remaining North American assets are unaffected by the UK acquisition.

The announcement follows a period of uncertainty about Titan's future in the UK due to the company's struggle to repay debts. During H209, Titan's UK roadside inventory was sold to Primesight and all activities in Ireland were ceased as reported by Screen Digest in December 09.

Titan's remaining UK inventory mainly consists of transport inventory (trains, train stations and buses) as well as retail inventory in supermarkets and shopping malls. Amongst its most notable operations a contract with Network Rail, including digital network Transvision - a network of 18 giant LED screens across main UK train stations. This digital network was a pioneer in DOOH and is still considered as very valuable. Since 2007, Titan was in partnership with Sky to provide its news content and sponsorship sales. Titan's entire railway coverage was capable of reaching 90 per cent of rail audiences according to Titan UK, and is estimated to be generating £26m per year. Additionally, a second digital network was recently launched by Titan, aiming to deploy 100 panels across UK shopping sites.

With this acquisition, JCDecaux marks a clear lead ahead of rivals Clear Channel Outdoor and CBS Outdoor with whom JCDecaux previously almost equally shared about 75 per cent of the total UK market. The addition of Titan's inventory will be very beneficial to JCDecaux' UK segment mix, enabling it to broaden its transit offer in particular. The French operator launched its UK operations nearly twenty years ago. Prior to Titan's acquisition, JCDecaux had focused the bulk of its activities on airport and roadside inventory.

The global OOH market has felt the full blow of the economic recession due its specific sector mix (e.g. automotive and financial) and a lack of adjustability to its inventory which forced prices down. First signs of stabilisation in leading operators' revenues have emerged in Q409. JCDecaux is particularly well positioned in comparison to CCO and CBSO with more varied format mix and lesser reliance on billboard inventory. In fact, during 2009, JCDecaux further emphasised its interest in acquiring CCO or CBS' Outdoor business.

Digital out-of-home suffered too in 2009. Many DOOH plans were postponed by advertisers seeking to spend on more established formats. In Q3, Titan had announced it was downsizing in order to focus on digital activities, but it is now another victim of the consolidation occurring on the UK DOOH market. In Q409, ASG Media went into administration and acquired by Train FX.

Total OOH market currently has approximately 5 per cent share of total net advertising revenues in the UK. It decreased by 18 per cent in 2009 and is expected to reach no more than 1 per cent growth in 2010 according to Screen Digest's latest forecasts.

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