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Media Mergers: Why it Matters


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The impact of technology has pushed more technology companies into the media space as various devices are increasing the demand for content.  Companies such as Facebook, Apple, Amazon, and Google are using their knowledge of consumers to create and obtain content.  This push into legacy Media companies has put their future in question.  Cord cutters have already put pressures on these legacy business models with even bigger threats now stemming from Technology companies. This inherently means that TV is no longer the sole entity competing for content. Media companies are now in the crosshairs as companies are vying to obtain more and more content.

The proposed merger of AT&T and Time Warner would create the nation’s biggest entertainment company*.  AT&T is arguing that it needs to buy Time Warner to fight off competition from technology companies such as Netflix, Amazon, and Google.  Those who object to this merger argue that it is decreasing competition and consumers will be hurt by the consolidation of power.  With fewer media companies in competition with each other, the easier it is for companies to raise prices hurting consumers.  The Open Markets Institute believes the merger would also allow AT&T to withhold content from rivals, harming ordinary Americans*.  We will continue to see media mergers in the near future as the industry reacts to outside pressures and must adapt in order to survive.

*Source: The Wall Street Journal, Bloomberg

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