Who has real media market power?
That’s what Randall Stephenson, chairman/CEO of AT&T Corp., is asking. What is telling is that the Time Warner deal -- while a significant potential win for AT&T -- may be somewhat small potatoes.
Stephenson, during an interview at The Economic Club of New York on Wednesday, says Time Warner’s Turner television unit has only a single-digit percentage share in terms of “views.” Other estimates roughly confirm Stephenson's data.
For example, in August, Nielsen’s TV live program-plus-seven days of time-shifted viewing metric had Time Warner at an 11.8% share for all its networks/programming, according to Pivotal Research Group’s analysis. This was below NBCUniversal’s 15.3% share and above Viacom’s 10% share.
Recently, the U.S. Department of Justice filed a lawsuit against the deal, worried about AT&T’s leverage with the Time Warner company -- in particular that if Turner blacked out its networks with a particular pay TV provider, those subscribers would then run to AT&T’s DirecTV. This is a key issue over the dangers of vertical media integration.
Now, in a new federal court filing, AT&T says it will not black out any Turner network in a pay TV agreement for seven years after the deal closes, as well as submitting to “baseball-style arbitration” when it comes to contract disputes with pay TV providers.
Overall, Stephenson says this is the new media age -- something the DOJ may not recognize.
For example, Netflix has over 100 million global customers and Google’s YouTube offers billions of views to billions of customers, while Amazon Prime may have 60 million total subscribers, who can consume its video content.
Stephenson's assessment: In addition to Turner’s small market share, DirecTV, while garnering a larger base of 25 million subscribers, still doesn’t command overall media market power.
Big company names like AT&T may raise fear in some. But this may be related to the past, when it was a more pure-play communications company.
So what gives? It can’t be Trump’s obsession about Turner’s CNN, can it? Is this the media market “power”?