We Told You So!

The Past

Last week AT&T made it known that it wanted to purchase Time-Warner, Inc. (comprised of HBO, CNN, TBS, and Warner Bros. studios) This is but one transaction in a string of many that is transforming the media business - pairing giant tech and telecom companies with entertainment content providers and distributors.  CMG has been on track with this transition for some years now (see list at the end of this post), harping on the fact that the cinema business was in for major changes not the least of which is the move toward day-and-date release on movie content across any number of distribution platforms, putting an end to the exclusive theatrical release window.

The Future

The old-line Hollywood studio has all but disappeared. Disney, MGM, Lionsgate, and a few other hangers-on are the only remnants of the once dominant content providers. Replaced by the likes of Google, Facebook, Apple, Amazon, and Netflix. We are witnessing a giant convergence of content and distribution which will change the entire business model of entertainment and how it is delivered to consumers worldwide.

AT&T has now entered the fray, challenging the big tech bullies. Verizon is also on the hunt, saying that it was interested in buying CBS and Viacom (which owns Paramount Pictures). Disney, is still the standalone, but even Disney (with a market cap of $150b) could be gobbled-up - Apple, for example, has $200b in cash and strong connections with Disney.

On the other hand, several of the giant streamers which are also content providers, such as Netflix, could be targets themselves. With a market cap of $60b Netflix could be bought - providing a solid worldwide distribution channel and highly acclaimed programming. For Disney, this could be a good strategy as it would provide further protection against a hostile purchase.

The game of entertainment creation and distribution will continue but the players and rules are, and will, change.  For cinemas, these game-changing events will further stress the need to dial-up their service, content offerings, environment, and customer-centric focus - because only in this way will they be able to survive and prosper.

List of prior posts on this topic:
- Cinemas vs Streamers 5/22/16
- Movie Industry In Flux 11/5/15
- So Darn Predictable 4/29/14
- Beginning of the End 11/6/13
- As Predicted by CMG 4/7/13
- Digital Condersions 4/8/12
- Future For The Cinema - Distribution 1/11/12

Jim