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1/ Remember when critics were panicking about AT&T's acquisition of DirecTV 5 years ago? Well, now T is already looking to sell at considerable loss. https://www.wsj.com/articles/at-t-again-exploring-a-deal-for-directv-11598645254?mod=hp_lead_pos4
It's another powerful example of technological change decimating market power. But the weird thing is..
It's another powerful example of technological change decimating market power. But the weird thing is..
2/ history repeated here & neither business exes or regulators learned any lessons. This exact same thing happened to Rupert Murdoch 15 years ago when he & News Corp took a considerable loss on DirecTV, calling it a "turd bird" while spinning it off. http://www.dslreports.com/shownews/Murdoch-Waves-Goodbye-to-His-Turd-Bird-aka-DirecTV-80132
3/ At time of News Corp-DirecTV deal, one FCC Commissioner worried the deal would “result in unprecedented control over local & national media properties in one global media empire. Its shockwaves will undoubtedly recast our entire media landscape.”
Couldn't have been more wrong
Couldn't have been more wrong
4/ at same time, regulatory advocate Jeff Chester predicted that Murdoch would use this “Digital Death Star” to "force his programming on cable companies by threatening a price war unless they give Fox favorable access."
LOL, nope. Nothing of the sort happened.
LOL, nope. Nothing of the sort happened.
5/ I documented this whole tale in my 2009 paper, "A Brief History of Media Merger Hysteria: From AOL-Time Warner to Comcast-NBC." https://techliberation.com/2009/12/02/a-brief-history-of-media-merger-hysteria-from-aol-time-warner-to-comcast-nbc/#_ftnref30
History shows how media markets are extremely dynamic and prone to disruptive change and technological leap-frogging.
History shows how media markets are extremely dynamic and prone to disruptive change and technological leap-frogging.
6/ But then AT&T walked right into the trap and this story played out again!! And, right on cue, the regulators used the same panicked rhetoric as they did a decade prior.
Nobody learned anything from history apparently.
Nobody learned anything from history apparently.
7/ Prediction: AT&T will soon sell DirecTV at a considerable loss. Charlie Ergen will try to make a DISH-DTV marriage happen. #Antitrust regulators will go nuts & move to block horizontal deal based on yesterday's market definitions. The firms will crash & burn after deal denied.
8/ And that'll mean history will also repeat again because then this will just be a replay of the Blockbuster & Hollywood Video failed merger in 2005! FTC moved to stop that horizontal deal even though markets were already decimating video rental markets. https://www.nationalreview.com/2020/07/antitrust-regulation-rapidly-changing-marketplace-requires-humility/
9/ Perhaps one day telecom execs & regulators will learn something by reading a little history and exercising a little humility.
Technological change is mighty wrecking ball.
/end.
Technological change is mighty wrecking ball.
/end.
