ATT Time Warner deal a sign of things to come

 

Tom Dougherty, CEO – Stealing Share

27 October 2016

 

 The future of television and mobile

 

The ground shook across the TV landscape when a potential ATT Time Warner deal was announced, forewarning investors and competitors that the behemoths are taking the changed landscape seriously.

The deal, at a cost of $85 billion, is a long shot to be approved by regulators. Even it fails, it demonstrates how jumbled the era of Peak TV has become.

“The old ways of doing things mean that content providers and distributors would just stand pat. They can’t do that.”

 

AT&T Time Warner deal

The AT&T Time Warner deal is a sign of the future

Our viewing habits have changed drastically over the last few years, with many cutting the cord, streaming services taking preference (especially among the coveted Millennials) and even ratings for the NFL dipping. Everyone connected to the industry is trying to figure out how to win – and how to survive.

The idea behind an AT&T Time Warner deal is to own both the content and delivery of programming. The strategy is akin to that of Netflix, producing original programming because content providers have become increasing unlikely to make licensing deals with it. They want to own distribution as well.

With that in mind, there are all kinds of rumors about forthcoming deals. Disney will buy Netflix (unlikely, although the two did finalize an exclusive deal for Netflix to stream Pixar and Marvel movies). Comcast will look to another mobile carrier, like T-Mobile or Sprint. (Or even Dish.) Already, Charter is merging with Time Warner Cable (not to be confused with Time Warner).

Will any of these rumored acquisitions or mergers actually work?

What the ATT Time Warner deal means

Most analysts are skeptical, noting that Time Warner would be in danger of losing its fees from cable systems if it gave AT&T customers shows it owns, like Game of Thrones.

But I’m not. The old ways of doing things mean that content providers and distributors would just stand pat. They can’t do that. The downfall of Peak TV is that there’s simply too much of it. (Much of it good, mind you.) There will be a bubble that bursts at some point. The ones left standing will be the ones that control both ends of the creative spectrum.

The ATT Time Warner deal may not be approved. But it won’t be the last one t0 get considered. These deals aren’t about gaining increased market share. They are about survival.

 

See more posts in the following related categories: AT&T Netflix Peak TV Time Warner

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