By Gil Regev
Free-Photos / Pixabay
When a telecom behemoth aims to hitch its wagon to an entertainment behemoth, the reverberations are bound to be staggering. So it is with the much-debated pending $85 billion merger between AT&T and Time Warner Inc. In a changing ecosystem increasingly dominated by mobile internet and streaming video, AT&T’s move to control a treasure trove of content is a canny one. Yet the year-old proposed deal is hanging fire, as the federal government has launched antitrust lawsuit against it. But when (or if) it happens, and the dust has settled, who will the winners and losers be?
AT&T, one of the leading operators in the U.S., has long been heading in more diverse directions, opening a two-pronged channel to provide its own deep usage data, along with richer, broader mobile content service as well. The would-be acquisition of Time Warner adds a valuable twist: exclusive access to a legendary library from the owner of the nation’s largest cable network, including the likes of CNN and HBO. AT&T would gain the prerogative to deny major networks access to desirable content (as in “Game of Thrones”). In turn, other high-profile networks could freeze out AT&T and any other operators wishing to access their own popular content—or charge high prices for their per-channel subscriptions.
Content is the driving force behind the proposed acquisition, and it’s the reason that the U.S. Department of Justice is pushing back. Today’s audiences are moving swiftly to consume data and entertainment via mobile devices, and as a result streaming services are gaining momentum over cable television. It was perhaps inevitable that mobile operators would move to collaborate with—and ultimately take over—content providers. Bringing content in-house allows carriers to control not only access, but also advertising space and the quality of content.
The government argues that post-merger, AT&T “would hinder its rivals by forcing them to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers.” Moreover, some officials fear that “the potential anticompetitive favoritism that the combined firm could bestow on its own products is not limited to price or access, but extends to the quality of the offerings as well.” The message to consumers: the quality of content will decline—and you lose.
Not so, the behemoths counter. Attorneys for AT&T declared that the proposed merger is “a pro-competitive, pro-consumer response to an intensely competitive and rapidly changing video marketplace.” By seeking to stop it, the government would in effect be “shielding rivals from new competition that would greatly benefit consumers.”
From a consumer perspective, governments in the U.S. and Europe would be wise to remember that the importance of competition is balanced by the realities of subscription rates, and the quality and variety of content available to the consumer.
While the outcome remains murky, it’s clear that the future is all about mobility, and this merger would lay a solid foundation for that future. Even more exciting, for operators to finally become an intrinsic part of the ecosystem is a Go to the full article.
Source:: Business 2 Community