AT&T eats Time-Warner as Media Competition fades Get ready to have a choice of about 4 media companies. Maybe as many as 6.

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Jun 13, 2018 No Comments ›› admin

By Lynn Woolley

The race is on.

Now that Federal Judge Richard Leon – one guy – has used his powers to completely change the media landscape, all the other ginormous media companies will be looking to get bigger.

We may eventually be down to 4 or five companies controlling television, cable, movies, cellphones, and comics. Yep, Disney already has Marvel and Time Warner has DC – so that means Superman is now headquartered in Dallas.

It also means your choices are fast fading.

The old “bundling” that we’re used to being pitched is going to change and costs to consumers will go up. I cannot tell you how much I opposed this move. The American system of free enterprise is based on competition. The radio industry consolidated a long time ago and thousands of jobs were lost. This new era now includes virtually all media.

What could possibly go wrong?

Nothing for the ginormous companies. AT&T, you’ll recall, already ate DirecTV. So now it has transmission capabilities – AT&T and it has a delivery system- DirecTV. The missing link was content. That’s TV shows, movies, and such.

By eating Time Warner, it gets CNN, other cable nets, and DC Comics in a deal worth $109 billion. The Justice Department fought it – with CNN’s bloated Jeff Toobin accusing Trump of trying to squirrel the deal because he hates CNN. Lots of people hate CNN. The reasons for opposing this deal have nothing to do with Trump. They have to do with maintaining a competitive marketplace for three reasons:

• Keeping a free and competitive marketplace to hold consumer costs down.
• Ensuring that content like Movies and TV shows are of high quality.
• Saving thousands of jobs.

One jerk of a judge had the power to change everything.

The Justice Department might appeal, but it won’t matter.

This deal is done. Just as I want my bank to be a bank and my insurance agency to handle insurance, and my broker to work at a brokerage house – I don’t want to buy everything from one vendor – even if they are nice to me and give me a bundled rate. I prefer competition. Competition is what ensures high quality and competitive costs and jobs.

Video: CNN insists that Trump tried to stop the merger.

I remember the good old days of radio when news reporters a disk jockeys were king.

A radio station in a medium to large market would pay top dollars for good air talent. The radio wars were famous: KLIF vs. KBOX in Dallas. WLS vs. WCFL in Chicago. KILT vs. KNUZ in Houston. KONO vs. KTSA in San Antonio. WACO vs. KBGO in Waco. The stations put out good money for big-voiced news anchors and “cookin’” deejays that could grab and hold an audience.

In today’s world, about 6 major companies own all the stations.

Your competitor is likely to be across the hall instead of across town. The need for ratings once led to excellence. Now advertisers in medium markets now have only one or two companies to deal with. That has led to automated system running radio stations.

Except for a few stations in large markets, the big-voiced newsman or newswoman is extinct. No longer needed. The fabulous deejays of the 60’s and 70’s are gone. Radio stations have “names” instead of call letters. Mix or Magic in Los Angeles sounds just like Mix or Magic in Nashville. Why? Because the same corporation probably owns them and manages them from a central location. Innovation is gone and radio is dying, giving way to Pandora and Spotify and other internet robots that young people subscribe to with no idea of how exciting radio used to be.

Where does Judge Leon’s decision lead?

Here’s what I can tell you.

Every big outfit in media is now looking to swallow or be swallowed so as to compete with AT&TTimeWarnerCNNDComics. Here’s a preview of what may happen:

• Disney wants to buy 21st Century FOX and has offered $52.4 billion in stock. Disney already owns movie studios, Star Wars, Marvel Comics, the Muppets, and (my personal favorite) Uncle Scrooge. But Comcast now says it wants FOX. The bidding war is on. Remember that NBC is a subsidiary of NBCUniversal, which is part of Comcast. Maybe Disney, FOX and Comcast will all merge. That would show AT&T!
• Sprint, poor little Sprint! The best it can do right now is try to eat T-Mobile. That would be a $26.5 billion dollar deal. The two carriers have to do something or AT&T will “bundle” them out of business. They must have a content creator or provider. DISH Network, perhaps? Expect an offer.
• CBS and Viacom have long been joined at the hip. They could and probably will merge after the fights for control of CBS are over. They’ve been married, got divorced in 2005, and will likely reconcile. Viacom owns MTV, Nickelodeon, Comedy Central, and other cable nets. CBS will want far more, and is probably looking for companies to eat as we type.
• Verizon has already eaten AOL and Yahoo. Obviously, it’s still hungry. It might be looking at CBS and Viacom. Or DISH. It wants to go after Facebook and Google for on-line advertising, but those would be hard companies to acquire. A deal with Jeff Bezos at Amazon might work.

And that’s what Judge Leon has unleashed.

U.S. District Court Judge Richard Leon, during the nvestiture ceremony for U.S. Attorney for the District of Columbia Ron Machen. May 24, 2010. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.

There are only three things left: On air TV stations, radio stations and newspapers.

Broadcasting in the traditional sense is on the way out. The internet is killing it. FM radio has been turned off in Norway and the UK is considering doing the same thing. AM radio may survive with talk radio because of content – but over-the-air broadcasting is in great danger.

Note that Warren Buffet has given a chance to live to only three newspapers: The New York Times, the Washington Post, and the Wall Street Journal.

These big mergers probably will not be interested in other print outlets. Amazon’s Bezos already owns the Post. The Wall Street Journal is already likely involved in mergers involving Rupert Murdoch. So not much in print is available for merging purposes.

I think FM radio will be dead in ten years – so no possibilities there.

Smaller AM stations are already doing dark. The big, metro AM’s with 50,000 watts of power might be grand licenses to go to 100,00 watts and survive with talk programming. If so, WBAP (Dallas), KRLD (Dallas), KFI (Los Angeles), WLS (Chicago), WOR (New York), KTRH (Houston), and similar high-powered stations might be desirable.

TV is another matter. It will last a while, but with the big networks all merging with companies that merge again and again, why would AT&T or Comcast want to use local TV stations? AT&T owns DirectTV and Comcast is a cable provider. They don’t need local stations anymore. Sad. But that’s where we’re going.

Get ready to have a choice of about 4 media companies. Maybe as many as 6. And when they offer you a bundle, know that it will be a short-term deal and the price will soon go way up. Competition is what makes the customer important. And there’s not much of that left.

lynn@BeLogical.com

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