• by Wayne Friedman , Staff Writer, May 10, 2018

Media consolidation takes no breaks -- now companies are tripping over themselves to gain even more leverage, especially in this marketplace. The big question is: What are the right moves?  

AT&T buying Time Warner; Sinclair pursuing a completion of its deal for Tribune Media; and late last year, Walt Disney planning to buy about half of 21st Century Fox for $52.4 billion.

The first two efforts are still in flux among federal regulators. The Disney-Fox deal may be just in the first inning: Comcast Corp. -- already a big media company -- wants to make a hostile bid -- a $60 billion better deal for Fox TV and film assets.

All this speaks of desperation when it comes to where things are going, that growth from existing businesses -- TV networks and production, pay TV distribution business, theatrical movies, as well as budding digital businesses -- still aren’t enough.

Comcast Corp. received federal approval in 2011 for its NBCUniversal deal -- but with certain restrictions, such as a non-operating role with its now 30% equity interest in digital video platform Hulu.

Imagine where that would go -- especially now with AT&T and Time Warner, in having a difficult time convincing regulators that a “vertical” merger poses no threat to the TV-media industry. Pursuing Fox is where content owners wants more content? That would seem to be a difficult task -- perhaps for Disney or Comcast.

How does one make the case that big traditional media isn’t so powerful? Especially since Google and Facebook control more than 75% of all digital media advertising.

And while rising revenues come to traditional TV-based media companies in the form of retransmission/subscription revenue and content sales, movies, TV and other businesses are iffy. Consider slipping cable TV network subscribers from cord-cutting, mediocre advertising revenue, and higher sports TV rights fees.

On the news of a possible hostile bid from Comcast Corp. its stock witnessed a dive, down 5%. So why do this? Media executives sense more risks, more aggressiveness is needed.  

While Comcast (and Disney) are pursuing strong digital media businesses -- including a growing successful Hulu -- all this isn’t enough.

They aren’t on the same scale as Google, Facebook, Amazon, or even Netflix -- in their digital media disciplines. This reflects that much of the digital media advertising business is made up from millions of much smaller advertisers than currently exists on big TV.

If the future comes down to traditional media battling new media, Comcast and Disney will need more leverage when Google, Facebook, Amazon or Netflix come looking for future partners.

Here are some key words worth remembering: Content is still king. But perhaps the kingdom is moving.