Even though Rupert Murdoch’s US$76 billion bid for rival media giant Time Warner Inc has been rejected, that does not mean the way TV shows and movies are watched is set to stop change any time soon.
The cash-and-stock bid by Murdoch’s Twenty-First Century Fox Inc was partly meant to counter consolidation among TV distributors like Comcast-Time Warner Cable and AT&T-DirecTV.
The more channels like HBO and Fox News Channel are assembled under one company, the stronger that company’s bargaining position is to demand licensing fees from TV distributors.
Time Warner also owns the TV channels CNN, TNT and TBS, along with the Warner Bros movie studio, which includes Batman, Superman and Harry Potter. Fox owns the 20th Century Fox movie studio, the Fox broadcast network and the TV channels Fox News and FX.
Much of the value in the television channels is because of the ever-increasing fees they are able to command from cable and satellite TV providers. Disputes over such fees have led to temporary blackouts of popular channels from various systems.
The Comcast-Time Warner Cable and AT&T-DirecTV deals are both undergoing regulatory review.
In disclosing the rejected bid on Wednesday, Time Warner and Fox indicated that their talks were over, but analysts do not expect Murdoch to give up. The offer was worth about US$86.30 a share based on Tuesday’s closing price.
If talks resume and a takeover succeeds, analysts see some possible consumer benefits.
A combination could accelerate the industry’s “TV Everywhere” push, in which traditional media companies make their channels available on the Internet as part of a TV subscription. It is the pay TV industry’s answer to the rise of streaming services such as Netflix, YouTube and Amazon.
The delay in making those channels available online has partly been licensing deals with content producers. A unified company with an even larger suite of channels from TBS to FX could make such deals standard industry-wide. Apps modeled after Time Warner’s successful HBO Go could also be applied to more networks.
“A player with more scale would be able to work on that and make digital content offering more user-friendly to the consumer,” Nomura analyst Anthony DiClemente said.
With a North American box office market share of around 30 percent, a combined Warner Bros-20th Century Fox movie studio could push movie theater companies to shorten the time between when a movie hits theaters and when it is available for sale or rental through digital outlets like iTunes.
A shortened window helps studios spend less money on marketing because they would not have to advertise each time a movie becomes available on a different platform. Theater companies have pushed back, as earlier digital release times could cut into ticket sales.
“They would have a lot of ability to experiment with new release patterns for movies,” FBR Capital Markets analyst Barton Crockett said.
While there is no guarantee that the cost of sports rights would come down, a merger would reduce the number of bidders for the rights and allow a combined company to spread acquired content over more channels. For example, after Comcast bought NBCUniversal, it rebranded Comcast’s Versus channel as NBC Sports Network and used it to carry figure skating and hockey during the in Sochi Winter Olympics.
Fox could bolster its sports channel, Fox Sports One, by combining efforts with Time Warner’s TNT to recapture the rights to broadcast NBA basketball games when they expire in 2016. TNT currently shares those rights with The Walt Disney Co’s ESPN and ABC.
TNT also has rights to college basketball and professional golf, adding to Fox’s Major League Baseball and NASCAR racing.
“A combined portfolio of sports could better challenge ESPN,” DiClemente wrote in a research note.
To blunt the rise of streaming services like Netflix and Amazon Instant Video, a combined company would have more power to withhold content or demand steeper licensing fees.
That, in turn, could force streaming services to raise subscription prices.
Further consolidation puts more media voices under the control of one entity. That is why Fox, which operates the lucrative Fox News Channel, is willing to sell Time Warner’s CNN, according to one person familiar with the matter. That person spoke on condition of anonymity because that deal point was not officially made public.
It is unclear how regulators would view so many pay TV channels being owned by the same company.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS