Media Companies Are Ready to Sell. Does Anyone Want to Buy?

[Rusty Muck]

Mergers and acquisitions haven't really been the Amazon & Apple business models. Their brand is that strong. They just decide they're going to compete for the NFL, and they have more money than anyone else. They really don't have to buy ESPN to get those rights. As I said, no matter how big WBD becomes, it's still dwarfed by the tech companies.

I'm still asking why one dinosaur (WBD) should merge into another dinosaur (Paramount). It's underpants gnome thinking to assume anything other than a larger, unsustainable dinosaur is going to result.

Your argument is suggesting that there's no reason for these companies to even bother with anything as they'll never be able to compete with Amazon, Netflix and DisneyHulu, no matter what they do.

 

[TheBigA]

I'm still asking why one dinosaur (WBD) should merge into another dinosaur (Paramount).

Why ask why? It's what they do. For them it's cheaper to buy than start something from scratch. Paramount already tried, and we see the results. Disney bought Fox in part to get more of Hulu. Plus to get more content to make their package more attractive.

Your argument is suggesting that there's no reason for these companies to even bother with anything as they'll never be able to compete with Amazon, Netflix and DisneyHulu, no matter what they do.

You obviously don't understand what I'm saying. I'm saying that in order to compete at all, they have to become bigger. Size matters.

 

[Rusty Muck]

Why ask why? It's what they do.

That's not an answer. You're still stuck with a larger dinosaur that is destined to fail regardless.

For them it's cheaper to buy than start something from scratch.

And we see how THAT strategy worked out.

You obviously don't understand what I'm saying. I'm saying that in order to compete at all, they have to become bigger. Size matters.

What you're saying makes absolutely no sense. How is a larger dinosaur borne out of two smaller dinosaurs going to be any way viable against Big Tech when they don't have any elements of dinosaurs in them? It's incomprehensible!

 

[TheBigA]

How is a larger dinosaur borne out of two smaller dinosaurs going to be any way viable against Big Tech when they don't have any elements of dinosaurs in them? It's incomprehensible!

Then you're the defeatist, forcing the dinosaur to stay in its cave, and just wait to become fuel for my SUV.

The companies "destined to fail" are those who fail to embrace the future.

 

[michael hagerty]

The O&Os are worthless without the network.

That will come as a huge shock to the owners of major-market affiliates that are not O&Os.

As I mentioned over the weekend in this thread, CBS is carried on 243 television stations in the U.S. Fifteen of them are O&Os. So there are 228 television stations owned by other companies that are CBS affiliates.

Eight of those affiliates owned by other companies are in the top 20 markets. That's 40 percent of CBS' carriage in the top 20.

 

[Rusty Muck]

Then you're the defeatist, forcing the dinosaur to stay in its cave, and just wait to become fuel for my SUV.

I'm being realistic and calling this out as a deal that solves no problems and creates a whole host of additional problems that will make the industry worse off in the long run. But go ahead and call logic and reason "defeatist".

 

[Rusty Muck]

That will come as a huge shock to the owners of major-market affiliates that are not O&Os.

As I mentioned over the weekend in this thread, CBS is carried on 243 television stations in the U.S. Fifteen of them are O&Os. So there are 228 television stations owned by other companies that are CBS affiliates.

Eight of those affiliates owned by other companies are in the top 20 markets. That's 40 percent of CBS' carriage in the top 20.

Without the O&Os there's nothing stopping the other companies from pulling out of a devalued CBS.

 

[michael hagerty]

Without the O&Os there's nothing stopping the other companies from pulling out of a devalued CBS.

Other than affiliation contracts being part of the deal---which they would be (we covered this over the weekend as well).

 

[Rusty Muck]

Other than affiliation contracts being part of the deal---which they would be (we covered this over the weekend as well).

Contracts are pieces of paper.

 

[TheBigA]

But go ahead and call logic and reason "defeatist".

To you, it's "logic and reason." To others, it evokes images of the ostrich.

 

[Theater of My Mind]

My view on video streaming is there needs to be a way to combine them into one package, the way cable combined competing channels and services.

I have to say, you are the only person I know who wants to see streaming turn into a cable TV model, but I can't say I'm surprised.

The whole reason everyone cut the cord and jumped to streaming is because of literally everyone's intense hatred for cable companies.

 

[Kelly A]

That's not an answer. You're still stuck with a larger dinosaur that is destined to fail regardless.

Businesses would argue that combined creates better economies of scale. That's a big reason why businesses merge in the first place.

And we see how THAT strategy worked out.

But two businesses that have a better chance of longevity, let alone success, should stay separate, smaller companies just because there's a chance it might not work out? If that were the case, then we'd still be back in the 19th Century.

 

[TheBigA]

I have to say, you are the only person I know who wants to see streaming turn into a cable TV model, but I can't say I'm surprised.

The whole reason everyone cut the cord and jumped to streaming is because of literally everyone's intense hatred for cable companies.

They hate what they became, forcing them to pay for channels they don't want. But they can also be a convenience.

The current streaming system means people might have several monthly bills in order to see their favorite shows.

 

[Rusty Muck]

To you, it's "logic and reason." To others, it evokes images of the ostrich.

It ain't just me. Actual paid analysts are calling pay-TV a business that is just about dead.

Experts say the future of broadcast media is dim amid frequent blackouts

With cable providers and station owners around the country unable to agree on how to maximize the most out of television, the future of broadcast media looks...

www.dallasnews.com

"I think cable is literally not a viable business anymore. They’re still operating, but it’s sort of like they’re already dead and I think some cable operators know that."

"Broadcasters have their hands over their ears, acting like reality’s not happening around them, and all they want to do is make more on fewer subscribers,” Hartman said. “If we don’t evolve our model, to meet the consumers where they are, we’re not going to have any consumers."

 

[davideduardo]

That will come as a huge shock to the owners of major-market affiliates that are not O&Os.

As I mentioned over the weekend in this thread, CBS is carried on 243 television stations in the U.S. Fifteen of them are O&Os. So there are 228 television stations owned by other companies that are CBS affiliates.

Eight of those affiliates owned by other companies are in the top 20 markets. That's 40 percent of CBS' carriage in the top 20.

My wife (also a radio person) and I compare the delivery of video content to the way we now deal with our supermarket:

• Sometimes we shop in person with a cart and an excursion up and down aisles. That is OTA / Cable TV: real time, lots of choices, but at their location and on their schedule. Cheapest, particularly with an antenna on the roof.
• Other times we order online, and then go at a scheduled time and they bring the packages to the car. Small or no surcharge, but can't pick the fresh produce to our liking and choice. Like cable with those awful VCR devices that
• Still other times, we have things delivered. Pay a fee, and it is that fit their available times. And when it is 122° outside in the summer, we can't order ice cream or frozen veggies or (ugh!) precooked meals. Sort of like paid TV services such as Netflix, where we pay extra to get things at our time and liking and get access to "deli items" that nobody else has.

The limiting factor here is the amount of money one wishes to spend. And, often forgotten, is the fact that a significant percentage of American families can't afford the more expensive services and will always be limited to OTA or basic cable or basic stream packages on "intelligent TVs".

During the pandemic, I got all the services, from Amazon and Netflix to Paramount+ and the like. I also upgraded to bigger OLED TVs around the house. But I had the budget for it. My fear is that the consolidation of delivery services (not the technology... just the content) will end up making less and less content available to those on a budget.

 

[michael hagerty]

Contracts are pieces of paper.

Yes, but they aren't just pieces of paper, and anyone who buys 15 CBS O&Os intending to violate the contracts will end up paying heavily in addition to the purchase price (assuming a court doesn't enforce them) and then be on the hook for programming to replace CBS in their market.

 

[TheBigA]

It ain't just me. Actual paid analysts are calling pay-TV a business that is just about dead.

Once again, what you call "logic & reason" is for these companies to roll over and die. Keep collecting their declining monthly fees from cable companies, and ignore the rest of the world. That article makes my case that they need to invest in new business.

 

[davideduardo]

They hate what they became, forcing them to pay for channels they don't want. But they can also be a convenience.

In most places, we have had decades of a single cable service. That makes them like the electric and gas companies, a utility. We dislike having no options.

I'd love to say "no sports channels" and save $30 a month. But the business model of cable does not work that way so I end up paying the fees the cable company itself pays for access to channels nobody in my home ever use.

The current streaming system means people might have several monthly bills in order to see their favorite shows.

And, in the end, the cost is higher. The victims here are those who can't afford to have multiple subscriptions and services.

 

[Rusty Muck]

Businesses would argue that combined creates better economies of scale. That's a big reason why businesses merge in the first place.

You're still stuck with incredible dead weight, onerous debt and dozens of zombie cable channels with diminishing value amongst them.

But two businesses that have a better chance of longevity, let alone success, should stay separate, smaller companies just because there's a chance it might not work out? If that were the case, then we'd still be back in the 19th Century.

There are no benefits for this deal and WBD-Par aren't even attempting to lay out any reasoning for it. The only result here is less choices and higher prices for the consumer. We might as well be back in the 19th century.

 

[Rusty Muck]

Once again, what you call "logic & reason" is for these companies to roll over and die. Keep collecting their declining monthly fees from cable companies, and ignore the rest of the world. That article makes my case that they need to invest in new business.

And yet this merger does none of that! They aren't going to give up the cable channels and no one would want a bunch of channels devoid of intellectual property anyway! It's why Paramount couldn't sell BET/VH1!