AT&T could dispose of assets and change the Hollywood landscape forever.
Over the past year we’ve seen AT&T change the way WarnerMedia works. The simultaneous release of Theater and HBO Max frustrated filmmakers and changed the way many people viewed the company. It alienated filmmakers in general, even as audiences flocked to HBO Max to subscribe to new releases.
Now we learn that AT&T may be interested in divesting WarnerMedia assets and selling them to the highest bidder. This kind of turbulent action will cost thousands of jobs and get the studio moving.
What is for sale? WarnerMedia assets include HBO, Warner Bros. Studios, and Turner networks such as TNT and TBS. These are valuable qualities that could be given to the winning bidder. Discovery has made strides to acquire some of these companies – but don’t rule out NBCUniversal to get them too.
This is the whole of the Wild West in terms of precedents. We have never seen companies with theater and television interests merge like this.
How and why does this happen?
It seems like AT&T dipped its toes in the entertainment store and hated the water. They worked to get people to stream and upset the industry in general. There were a lot of setbacks and they realized that it would be incredibly expensive to produce movies and TV shows that would allow them to compete with Apple, Netflix and Amazon.
Places like The Hollywood Reporter say a merger between Warner and Discovery is imminent.
When mergers like this take place, they can be long and involve many smaller companies in the process. Could someone come in and just buy HBO Max or even take TNT / TBS to put them under a different banner?
Nothing stops a sell-off except that all of the pieces are valuable, as are their content catalogs.
What does that mean?
We’re going to start another big company that has control over a lot of content (and the jobs of everyone who works on that content). As the LA Times said The deal could be worth $ 43 billion and AT&T would own 71% of the new company and Discovery 29%.
But what will every company expect from the business? We have nothing tangible there. Insert magazine had several predictions of what might happen, but that’s all speculative.
The most obvious side effect is that smaller streaming services that are bought and sold may start up. Kind of an arms race in the streaming wars to see which platform can draw the best content.
This type of movement could result in smaller streamers being drawn into larger companies that sell access to them or their libraries through bigger names. As more telecom companies join the mix, the commercials should change as these locations are heavily reliant on product placement. It feels like the early days of television with products that sponsor shows.
In the end, that means we haven’t really conquered “cutting the cord”. Offers like this package the channels you want for a fee. Isn’t that the same as cables? How is that better? Especially when a large company controls everything? Where is the market or the incentive to keep prices down?
Let us know what you think in the comments.