By James DeRuvo (doddleNEWS)
Remember a few years back when AT&T tried to buy T-Mobile, and the FCC denied the deal because it would represent a dramatic shift that wouldn’t benefit consumers? Well that didn’t seem to be a problem when AT&T bought DirecTV last year. And the FCC doesn’t seem to be worrying now that the ‘DeathStar Network’ has made a move to control one of the largest media companies in the industry, Time Warner. And it’s all driven by Netflix.
“When Jeff [Bewkes, Time Warner’s chief executive] and I started talking, it became clear to us very quickly that we shared a very similar vision. Time Warner, we believe, is the clear leader in premium content.” – Randall L. Stephenson, AT&T’s chief executive
This isn’t the first time in recent memory that Time Warner has been bought by a mega media concern. Back in the late 90s/early 00s, the disastrous merger of AOL-Time Warner at the height of the dotcom boom had a great deal of new media promise, but was eventually divorced when the huge corporation proved unwieldy for fledgling CEO Steve Case. As a result, Case lost his company and AOL was spun off, going from a leader in internet-based content (and of course, providing internet) to a footnote in history.
“#DejaVu.” – Steve Case on Twitter
This time, the AT&T-Time Warner deal is going down for just north of $85 billion, and AT&T is already large enough to handle it thanks to their earlier acquisition of DirecTV. The sale is largely centered around media assets, like HBO, CNN, and Warner Bros. Studios, and not the Time Warner Cable assets which were sold to Charter earlier this year. But even so, it continues a mega merger trend that has been happening for the last several years in mass media.
Comcast bought NBC Universal for about $30 Billion, giving them control of the studio, theme parks, and TV channels like NBC, MSNBC, Bravo, USA Network and others. Then Lionsgate bought Starz for $4.4 billion. And according to the NY Times, even CBS and Viacom, which split up ten years ago, is thinking about getting back together as a single company.
“Time Warner chairman and C.E.O. Jeff Bewkes and his senior management team can see where the entire legacy media world is headed: secular decline. We believe Bewkes will end up being remembered as the smartest C.E.O. in sector — knowing when to sell and not overstaying his welcome to maximize value for shareholders.” – Richard Greenfield, a media analyst at BTIG
Verizon has picked up the floundering Yahoo. Over the past several years, Disney bought ABC, Pixar, Marvel and Lucasfilm, and it seems that the pendulum is swinging back towards a handful of companies controlling our media options. That can’t be good. But it seems to be driven by cord cutters looking to get better media consumption options through streaming portals like Netflix. So if you can’t control the customer, you can certainly control the content they want to see.
Back in the golden age of Hollywood, movie studios owned the theaters their films were shown in, but in 1948, the Supreme Court ruled in Paramount vs. the United States that studios had to sell their theaters because they held a controlling monopoly that forced higher rates on film rentals. So I’m not really sure why this is any different.
But one thing is certain, with that kind of financial burden leveraging AT&T, our cable and satellite bills are going to get a lot higher, not lower, and Congress seems to be paying keen attention to it. Senator Richard Blumenthal of Connecticut isn’t convinced that this merger will be in the best of the consumer.
“I will be looking closely at what this merger means for consumers and their pocketbooks,” Blumenthal said warning against approval of the deal, “and whether it stands up to the rigorous review standards set by the Department of Justice’s antitrust division in the last few years.”
HT – The Gray Lady