English Entertainment
Content a ‘Game of Thrones’; AT&T’s control over HBO, Cartoon Network, Warner Bros faces regulatory lens
MUMBAI: The global media landscape is resulting in a new juggernaut as an internet and cable behemoth yesterday purchased an entertainment conglomerate making the former unmatched in its size and reach to consumers through home broadband, smartphones, satellite television and a battery of movies and cable channels. This deal could lead to more cautionary flags than Comcast’s merger with NBCUniversal in 2009.
The US$ 108.7-billion AT&T, Time Warner merger has been met with suspicion as analysts raised antitrust concerns that it would create unfair pricing and lead to further media consolidation. The
cash-and-stock deal values Time Warner – with CNN, HBO, and Warner Bros Studios – at over $85 billion, and involves AT&T taking on its debt.
AT&T, over a year ago, became the nation’s largest pay-TV operator when it acquired DirecTV. Now, Time Warner would give AT&T HBO, CNN, TBS, TNT, Cartoon Network and Warner Bros., Hollywood’s biggest television and film studio. The massive deal has become a subject of discussion in the US presidential campaign. Donald J. Trump, condemning the deal, said he would block it if he were the president, “because it’s too much concentration of power in the hands of too few.” Hillary Clinton has assured to be tough on consolidation and corporate megapowers.
Although the latest merger is considered “vertical integration” as the two broadly do not compete against each other as compared to other “horizontal integration” of similar businesses, regulators could look at other ways AT&T might affect the media ecosystem if the deal were to consummate.
AT&T may possibly make it more expensive for its competitors to gain access to HBO or Time Warner’s content or give preferential treatment to its own programming.
A brief history of media/telecom deals
1995
Turner Broadcasting System and Time Warner announced a $7.5-billion merger, bringing together brands including Warner Brothers, CNN, Time magazine, and the Cartoon Network.
2000
AOL announced its plan to buy Time Warner for over $160 billion.
2005
SBC Corporation acquired AT&T for over $16 billion.
2008
Time Warner spins off its cable unit, which becomes Time Warner Cable (not a part of the current deal).
2009
Time Warner spins off AOL.
2011
Comcast receives regulatory nod for its $30-billion bid to buy a majority stake in NBCUniversal. Comcast took over NBCUniversalm completely in 2013, as GE divested its stake.
2013
Time Warner spins off its Time Inc magazine division.
2014
Verizon buys out Vodafone’s stake in Verizon Wireless for $130 billion, gaining complete ownership. Time Warner turns down $ 80-billion bid from Twenty-First Century Fox.
2015
Comcast drops its $45-billion bid to buy Time Warner Cable after the regulator opposes the merger over concerns of creating an Internet provider and a cable operator with too much control. Verizon purchases for $4.4 billion. AT&T gets government nod to purchase the satellite TV company DirecTV creating one of the largest pay-TV servicen providers to compete with Comcast.
2016
Regulators approved US$ 88-billion merger of Charter Communications with Time Warner Cable and Bright House Networks, creating the third-largest video provider and the second-largest broadband
provider. (Comcast purchased DreamWorks Animation for $3.8 billion to compete against Disney.) Time Warner bought a 10 per cent stake in Hulu for $583 million.
Yahoo and Verizon announced a $4.8-billion merger that would give the latter ownership of the former’s Internet assets. AT&T acquires Time Warner.
Regulators could seek promises from AT&T and Time Warner to make content from HBO like “Game of Thrones” or cable networks like CNN available through apps or through streaming, not withholding them from competitors, which could be addressed in conditions attached to an approval.
UK: The aerial is losing its grip. As broadband becomes the default way Britons watch television, the UK is edging towards a decisive, and divisive, question: should Freeview be switched off by 2034? The issue, highlighted in reporting by The Guardian, has exposed deep fault lines over access, affordability and the future of public service broadcasting.
For nearly 25 years, Freeview has delivered free-to-air television from the BBC, ITV, Channel 4 and Channel 5 to almost every corner of the country. Even now, it remains the UK’s largest TV platform, used in more than 16m homes and on around 10m main household sets. Yet the same broadcasters that built it are now pressing for its closure within eight years.
Their case rests on a structural shift in viewing. Smart TVs, superfast broadband and the Netflix-led streaming boom have pulled audiences online. Advertising economics have followed. By 2034, the number of homes using Freeview as their main TV set is forecast to fall from a peak of almost 12m in 2012 to fewer than 2m, making digital terrestrial television, or DTT, increasingly costly to sustain.
But critics say the rush to switch off risks abandoning those least able, or least willing, to move online.
“I don’t want to be choosing apps and making new accounts,” says Lynette, 80, from Kent. “It is time-consuming and irritating trying to work out where I want to be, to remember the sequence of clicks, with hieroglyphics instead of words. If I make a mistake I have to start again.”
Lynette is among nearly 100,000 people who have signed a “save Freeview” petition launched by campaign group Silver Voices. She fears the government is about to “take [Freeview] away from me and others who either don’t like, can’t afford, or can’t use online versions”.
Official figures underline the fault lines. A report commissioned by the Department for Culture, Media and Sport estimates that by 2035, 1.8m homes will still depend on Freeview. Ofcom’s analysis shows those households are more likely to be disabled, older, living alone, female, and based in the north of England, Wales, Scotland and Northern Ireland.
Freeview is owned by the public service broadcasters through Everyone TV, which also operates Freesat and the newer streaming platform Freely. After two years of review, DCMS is expected to set out its position soon, drawing on three options proposed by Ofcom: a costly upgrade of Freeview’s ageing technology; maintaining a bare-bones service with only core PSB channels; or a full switch-off during the 2030s.
The broadcasters have rallied behind the third option. They argue that 2034 is the logical cut-off, when transmission contracts with network operator Arqiva expire. By then, they say, the cost of broadcasting to a dwindling audience will far outweigh the returns from TV advertising.
Ofcom agrees a crunch point is approaching. In July, the regulator warned of a “tipping point” within the next few years, after which it will no longer be commercially viable for broadcasters to carry the costs of DTT.
Others see risks beyond economics. Questions remain over whether internet TV can reliably deliver emergency broadcasts, such as the daily Covid updates, in the way that universally available DTT can. The UK radio industry has also warned that an internet-only future for TV could push up distribution costs and force some radio stations off air if PSBs no longer share Arqiva’s mast network.
“It is a political hot potato,” says Dennis Reed, founder of Silver Voices, who says he has “dissociated” his organisation from the government’s stakeholder forum, which he believes is “heavily biased” towards streaming.
The Future TV Taskforce, representing the PSBs, counters that moving online could “close the digital divide once and for all”. “We want to be able to plan to ensure that no one is left behind,” a spokesperson says, adding that rising DTT costs could otherwise mean cuts to programme budgets.
The numbers show the scale of the challenge. Of the 1.8m Freeview-dependent homes projected for 2035, around 1.1m are expected to have broadband but not use it for TV. The remaining 700,000 are forecast to lack a broadband connection altogether.
Veterans of the analogue switch-off, completed in 2012 after 76 years, recall similar fears of “TV blackout chaos”. Around 6 per cent of households were labelled “digital refuseniks”, yet a targeted help scheme and a national campaign, fronted by a robot called Digit Al voiced by Matt Lucas, delivered a largely smooth transition.
This time, the BBC is less keen to foot the bill. Tim Davie, the outgoing director general, has said the corporation should not fund a comparable support programme for a Freeview switch-off.
Research for Sky by Oliver & Ohlbaum suggests that with early awareness campaigns and digital inclusion measures, only about 330,000 households would ultimately need hands-on help ahead of a 2034 shutdown.
Meanwhile, viewing habits continue to fragment. Audience body Barb says 7 per cent of UK households no longer own a TV set, choosing to watch on other devices. In December, YouTube overtook the BBC’s combined channels in total UK viewing across TVs, smartphones and tablets, albeit measured at a minimum of three minutes.
That shift may accelerate. YouTube has recently blocked Barb and its partner Kantar from accessing viewing session data, limiting transparency just as online platforms consolidate power.
“When the government chose British Satellite Broadcasting as the ‘winner’ in satellite TV it was Rupert Murdoch’s Sky instead that came out on top,” says a senior TV executive quoted by The Guardian. “There already is such an outsider ready to be the winner in the transition to internet TV; it is YouTube.”
Freeview’s future now hangs on a familiar British dilemma: modernise fast and risk exclusion, or protect universality and pay the price. Either way, the aerial’s days as king of the living room look numbered.
