Wednesday, October 26, 2016

AT&T’s purchase of Time Warner - what does it mean for telecom and TV?

AT&T’s purchase of Time Warner - what does it mean for telecom and TV?

After much speculation and wondering, it’s happened. AT&T has reached an agreement on the purchase of Time Warner. According to Reuters, the selling price is about $85 billion, which would make the acquisition the largest deal in the world in 2016.

The purchase gives AT&T ultimate control over all of Time Warner’s stable of TV channels including CNN, TNT, TBS and HBO as well as the film studio and other assorted media assets. The deal was sold as the first step in Time Warner becoming able to transition from a traditional pay TV format to a more mobile-friendly streaming media system.

There’s no doubt that the internet is winning the entertainment media battle. Streaming, which was seen as no real competition to the big cable channels not that long ago, is fast becoming the medium of choice for the mobile generation.

Purchasing a massive media-generating apparatus is a good move for AT&T because the company sells both wireless phones and broadband service. In other words, they can now create the content their customers buy their devices to view.

The move puts AT&T in the driver's seat of the massive transition taking place in entertainment media. No one really knows if mobile is a transitional point into something different, or if it will – as cable has – define entertainment interaction for multiple generations.

What is certain is that TV, as older generations interacted with it, is on its way out. One of the last stands was live sports, and, finally, networks and sports leagues are finding ways around the TV contracts that trapped them into a dying media delivery system.

The move is also a big win for AT&T because Time Warner recently rejected a similar offer from 21st Century Fox. Beating out Fox means AT&T not only finds itself in a strong market position but also as an evenly matched competitor with Fox and other media titans in the march toward what TV media is becoming.

Ronn Torossian is the Founder and CEO of the New York based public relations firm 5WPR: one of the 20 largest PR Firms in the United States.

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