Sunday, December 17th, 2017
DISNEY BUYS MURDOCH
A. Michael Noll
December 16, 2017
© Copyright 2017 AMN
Walt Disney is purchasing Murdoch’s entertainment empire for over $50 billion. Is this a great deal – or a huge challenge for the future of Disney?
The vision is a future in which video entertainment (and sports) is downloaded over the Internet directly from the source, bypassing the middle distributors, such as the cable TV company, the satellite company, or the phone company. This vision has been known as cable bypass. But it assumes an Internet that is “free.”
Disney, and its Bob Eger, should be frightened that the FCC just terminated “net-neutrality,” which means that the middle distributors can charge different Internet rates depending upon the source and the content.
Rubert Murdoch is known as a very shrewd businessman. The fact that he wants to sell his entertainment properties should be the cause of suspicion. If it looks like a good deal, it most likely is a good deal – for Murdoch.
Indeed, the Internet was not designed for the delivery of broadband video. The bandwidth (or data capacity) and need for instantaneous delivery, coupled with the one-way nature, of video is costly. One solution is to charge more, as now allowed by the elimination of net-neutrality. Another solution would be a network optimized for the technological demands of video – but that would require technological innovation. Unfortunately, the Bell Labs of the past that used to give us such innovation is no more, and the telephone companies, such as AT&T, simply are not innovative.
A. Michael Noll is Professor Emeritus of Communications at the Annenberg School for Communication and Journalism at the University of Southern California. He has written many articles and opinion pieces about the telecommunications industry and technology.
Friday, November 24th, 2017
The 1st INTERNATIONAL CONFERENCE ON MEDIA AND COMMUNICATION (ICMC 2018), hosted by the Department of Communication Studies of Abu Dhabi University, will be held on March 19-21, 2018 at the Radisson Blu Hotel, Yas Island, Abu Dhabi, UAE. The former director of the Quello Center, Emeritus Professor Steve Wildman, will be presenting one of two keynotes.
The Aims and Objectives of ICMC 2018 are to exchange best practices and promote international partnership and cooperation among academia and media practitioners worldwide and to create an international forum to present, discuss and exchange the latest academic research in media and communication.
Dr Mike Friedrichsen, President, Berlin University of Digital Sciences, Germany, will be presenting the other keynote.
Wednesday, November 22nd, 2017
AT&T Goes Hollywood
A. Michael Noll
© Copyright 2017 AMN
AT&T wants to purchase Time Warner — the White House and the Justice Department correctly oppose the acquisition. The acquisition would create a huge vertical integration of content and conduit that would not benefit consumers, in my opinion. But the local telephone companies have a long history of lusting after content and Hollywood.
Today’s AT&T is really a former local Bell company: the past Southwestern Bell that then became SBC Communications which then acquired AT&T and then wrapped itself in the AT&T identity.
Over two decades ago, the local Bell companies chased after the entertainment industry. And now again one of the remaining of the two super Bells – AT&T – is again inflicted with Hollywood fever.
AT&T is a conduit company, providing the cables and wireless paths over which consumer access various services. In 2015, AT&T extended its control over conduit through its acquisition of DirecTV for nearly $50 billion, delivering video over satellite to homes. But throughout history, the old Bell operating companies have lusted after also providing the content that their customers want to access over the conduits.
The telecommunication conduit business in the United States has become mostly a duopoly. AT&T and Verizon dominate wireless. Either AT&T or Verizon and a CATV company dominate wired access. Duopolies inherently adjust “competition” so that markets are shared and profits maximized, without attracting government attention. In the late 1940s, the studios were forced to divest their vertical integration of movie theaters. So today If AT&T wants to become a content company, it should be required to divest its wireless and wireline conduit businesses.
AT&T knows little of Hollywood and the news and entertainment businesses. It should stick with its strengths in providing wired and wireless conduits, as I wrote in 1993.* One might argue that if AT&T wants to lose its shirt chasing Hollywood, then let it. However, like decades ago, now is still not the time for AT&T to go Hollywood.** “Hollywood” might well end up as “Follywood” for AT&T.
*“Baby Bells Should Stick With Strengths,” by A. Michael Noll, Los Angeles Times, October 22, 19933, p. B15.
**“The phone company has gone Hollywood,” by A. Michael Noll, Morris County Daily Record, January 7, 1994, p. A11.
November 22, 2017