After a long court battle AT&T wins approval to buy Time Warner for $85 Billion.
What is this all about?
From the standpoint of AT&T this is a matter of survival. Traditional cable TV viewership, (cable, telco and satellite) is declining as tens of millions of Americans are “cutting the cord”. The old cable TV is being replaced by streaming services such as Netflix, Amazon, Hulu and a somewhat lengthy list of smaller streaming services. Companies that have provided cable service need to find a new product to sell if they want to stay in business. In this “brave new world” content is king and Time Warner has content.
The new AT&T logo
From the standpoint of the Department Of Justice this will hurt consumers as prices rise and competition is stifled. The DOJ failed (miserably) to demonstrate that contention in court and the judge, (Richard Leon) ruled that the merger could take place without any restrictive conditions. Many people had expected the judge to impose certain restrictions on the merger but in the end the merger was allowed with no restrictions. There has been some talk that the government will appeal the decision. While that could result in another lengthy court battle it is unlikely to change the outcome.
The merger between AT&T and Time Warner was finalized two days after the decision.
Many other media distribution and content providers have been sitting on the sidelines watching this case to see if such mergers would be allowed and if so under what conditions. Already Comcast has stepped up its efforts to acquire Fox entertainment in a bidding war with Disney. A tsunami of other such mergers is almost certain to occur.
What does this mean to us “average” people?
In the immediate future most people won't notice much change from this decision. In the long run it will amount to big changes in the media industry. Will prices rise? Of course they will, just as the price of about everything else from A to Z is going up. Will the price of broadband and entertainment rise more because of this ruling? That remains unclear.
The Eye & Ear of Time Warner
AT&T is a behemoth and has considerable power but Comcast is no “shrinking violet” and Charter is another contender. Between the three of them they provide broadband service to over sixty million US citizens. And it STINKS! Broadband access in the US is slow and clunky. Most of the rest of the world is way ahead of us. We don't even make it into the top ten. And in some of these countries the people get there streaming for a much lower price and in some cases it is free.
Remember that entertainment is a worldwide business these days. Patents and trademarks are not universally honored and a lot of money can be made, or lost “overseas”. Just because a company is big today is no guarantee that they will stay that way. Remember Standard Oil, Enron, Blockbuster, Pan Am, Polaroid or Tower Records just to name a few.
So it's buy or die in media these days. AT&T, Comcast Charter and other “mega corps” are under pressure on all sides from competitors, governments and customers, (including me). If they don't keep up and adapt to the changing technology they will go the way of Kodak!
And remember always back it up!
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