The once happily married, and currently divorced companies decided to not marry again. Sumner Redstone, owner of National Amusement, which owns both Viacom and CBS, and his daughter Shari decided to walk away from the deal. The Redstone's decided to keep Viacom independent and focus more on family.
Viacom runs many well known networks, many that you may watch or heard of:
Image source: http://www.viacom.com/brands/pages/default.aspx
CBS is of course, a broadcast station, but they also produce and distribute content. CBS also owns and operates many local television and radio stations around the United States. Much has changed within the media industry since CBS and Viacom split in 2006, and is drastically different since initally merging in 1999.
Here's the kicker though, the parent company of CBS is the same as Viacom's, National Amusements. Funny how that works, huh? National Amusements also owns Showcase Cinemas all around the globe.
With both companies being content producers and distributors, and having the same parent company, they're a perfect match. They're more of a match in today's media industry than they were in 1999's media industry, and even 2006's.
Viacom and CBS are still media giants by themselves, and have no doubt kept up with with industry as a whole since 2006. With multiple giant media mergers in the meantime, this almost seemed business as usual and competition at work. Comcast and NBCUniversal merged, AT&T & DirecTV, and just recently (not approved) AT&T and Time Warner just to name a few. It honestly seemed like Viacom and CBS were just keeping up with the industry.
This deal would have been appoved by the feds, due to the history of the two companies and the scale of the merger. Competition and market forces could easily be argued in favor of the merger due to recent megers within the industry.
It was reported though, according to Fox Business, that there still may be a deal sometime in the future. Again, it almost makes sense for these two to remerge, and it'll more than likely happen in the next 5 years. The reason it'll happen in the next 5 years is because, in just 2 years talk of the deal will rehash. Executives will end up meeting, board meetings will take place, and the industry will have since flown over them.
The deal will end up being accepted by both companies, roughly in 3 years, and it'll get passed along to the regulators, who will by then have seen and approved many deals like it. Lets shoot for 4 years, 2020, that Viacom and CBS will be one again.
Like stated above, the industry will since have flown over them in terms of potential busness models and products, but they'll still make money from it. Money, innovation, and customer satisfaction, that's what counts when doing deals like this. I'm sure they'll launch their own streaming pay-TV service, but I'm also sure one if not both companies will launch one on their own. You should also think Virtual Reality, many content and media companies are flocking to it, check out Pulsar's write up on Google Daydream.
In 2016 though, the Redstone's just weren't ready, could it be because Sumner Redstone is 95? Maybe, but only time will tell. Viacom has had many internal conflicts in recent months too, so that could be a potential reason. National Amusements could have another trick up their sleeve, who knows right now, the only thing that matters is Viacom and CBS will be seperate companies.
Fortune ran a headline today, saying "Here's Why Viacom Lost Almost $1 Billion in Market Value Today". It's not a good day to be a shareholder for either company, but definitely not Viacom. Click the "F", read the article.
Viacom and CBS stocks as of close today, not looking so hot:
Mergers and acquisitions, it’s a part of free enterprise and a capitalist economy, and they come small and big. AT&T and Time Warner both are familiar to mergers and acquisitions, but neither know small. Some can be good for the economy and some can threaten it.
In 2014 AT&T dropped $49B for DirecTV and made the sale. In 2009 Time Warner let go of Time Warner Cable, which then got bought by Charter Communications (now named Spectrum) for $60B in May. AT&T seems to have been beefing itself up since 2014, the once simple telephone, wireless, and Internet company is en route to be a media giant like Comcast.
Compared to those mentioned above, the price tag for this merger trumps those. AT&T is ready to pay $85B for Time Warner.
If this merger passes the regulatory hurdles (FCC & FTC), AT&T will pass up Disney and be right along side Comcast in the media and telecommunications industries. AT&T owns DirecTV, the 2nd largest TV provider in the US, but AT&T also has their own TV service called UVerse.
AT&T UVerse has been around since 2006, but a decade later it is much more widespread and has a 4 part package to it. Those 4 parts are: TV, Internet, Landline Telephone, and Wireless (cell phone). UVerse however is only available in select states as shown below.
Image source: http://www.att.com/local/
However since 2014, UVerse availability doesn’t matter as much to AT&T because AT&T has DirecTV which is available almost nationwide. AT&T even promotes on their website, if you’re not in the UVerse area, go to DirecTV. So what does this mean exactly? Since AT&T controls the pipes to bring consumers content (DirecTV and UVerse), them buying Time Warner makes perfect sense, to control some content, and Time Warner has a lot of it.
Time Warner owns: TBS, TNT, CNN, HBO, Cartoon Network, and Warner Brothers. This gives AT&T’s UVerse and DirecTV almost exclusive content of some of the biggest names in TV. This is great for AT&T, they’ll no longer have to pay Time Warner to use their content, but will they have control over pricing for their competitors? That is one big question regulators need to look into and find an answer, because that could upset the industry big time.
If AT&T wants consumers to believe this is good for them, they need to start promoting and advertising on what AT&T and DirecTV will offer if the deal passes. Lower UVerse and DirecTV prices would be a great way to start. If AT&T can make that argument to the regulators in Washington, then this deal should have no trouble passing. If AT&T can’t make a decent enough argument to regulators and convince consumers that this deal will make competition better and benefit the consumers, then this deal is done for.
You may be asking yourself, what about Comcast and NBCUniversal? Isn’t that the same thing? Yes it pretty much is the same deal, a large content distributor bought a content provider, but did it really benefit consumers? Most Comcast customers would say no. Like Comcast and NBCUniversal, AT&T-Time Warner is just more consolidation it seems, but consolidation is always good for the market, if it benefits consumers.
The AT&T-Time Warner deal has so much potential for benefitting consumers, but talk is one thing and action is another. Like stated above, AT&T needs to make the case, persuade, and then execute it for this to be a win-win. If the deal does go through, it’s either going to force Verizon and other like-minded companies within the industry to go out a buy a content provider or create antitrust lawsuits. Discovery Communications CEO David Zaslav, echoed that in a Fox Business article. Zaslav said “The bigger consolidation question is what happens now to the distributors? Do the cable operators now have to find a wireless solution in the U.S.? Most of them inside the U.S. have felt that they needed to. Does Verizon now look at AT&T and say wait a minute? They have DirecTV and now they have a huge amount of content, we don’t have any one of those things. Do we need one or the other?”.
Antitrust lawsuits could arise due to the fact that AT&T will have a lot of power, and like Donald Trump said “too much concentration of power”, which is true. However it depends what AT&T does with that power; if they abuse it, expect lawsuits, and if they don’t, expect competition to spark. Touching on Trump’s thoughts of this, like he said in Gettysburg, PA, he thinks this gives AT&T too much power and deletes a competitor in the market while strengthening another one, which is true. Trump wants to break up the deal, but he should wait and see how it plays out. I get Trump’s concern, but being a capitalist country we need to let the free market work it out. This could very well benefit consumers, but at the same time it can harm competition and the market, or worse case it hurts consumers and competition.
AT&T’s goal is to make as much money as possible, and this deal will reach and exceed that goal massively. AT&T will have to take on some debt at first though, about $175B according to
The New York Times. In order to make this purchase, AT&T will have to pay with “new debt”, it’s own stocks, and “on hand” cash, which AT&T can easily and affordably do. AT&T also has a bridge loan committed to this deal for about $40B, JPMorgan Chase representing $25B and Bank of America representing $15B, and that’s a lot of cash to hand out. However this cash will only be used as a last resort. All this information is from The New York Times.
Shareholders of both AT&T and Time Warner seemed to have not publicly addressed this merger, but I’m sure there is a mixture of for and againsts within in both companies, even for stakeholders. Also if this deal does not go through, since this merger has been accepted between both companies, employees from both companies working directly with the merger have their jobs on the line. This is because during a merger, employees working for both companies included in the merger know each others ways and secrets, so if this merger gets struck down in Washington the employees have to be let go.
All AT&T consumers can expect everything Time Warner to be exclusive to them, or they’ll see a lot more of Time Warner’s content on their devices. Like stated earlier, AT&T must lower their prices for UVerse and DirecTV since they’ll own a large chunk of content and no longer have to pay for it. AT&T can make customers and regulators very mad if this deal doesn’t trickle down and only raise consumer prices and issues. Expect AT&T’s wireless division to take full advantage of having Time Warner’s resources too, think advertising and apps. That is something consumers could look forward to, well apps that is, AT&T will look forward to that ad revenue. AT&T users could soon have exclusive TBS, HBO, CNN, and other Warner networks/studios content and apps on their smartphones, and that could attract new customers as well.
Pay-TV AKA streaming TV, like Sling TV and Playstation Vue, will for sure come out of this. That is the future, and AT&T knows that, and quite frankly, I believe the both the telecommunication and media industries know that. AT&T will be able to stream exclusively Time Warner content, and therefore use that savings in cash on other content. AT&T will give DirecTV a direct product to compete against DISH Network’s Sling TV. That alone will shake up the industries and the markets, and it’ll be the better, a win-win for all stakeholders. This product alone would be a real money maker for AT&T, because it’ll more than likely be sold under the DirecTV brand, and more people have DirecTV than DISH Network. DirecTV is up there with Comcast, and is a very common household name. AT&T’s UVerse simply doesn’t have the consumer reach that DirecTV does, nor the resources...yet.
It’s clear AT&T is taking advantage of the “multiple screens” approach. AT&T wants their customers, and their hopeful future customers to be reached on every screen possible. AT&T is simply maximizing their profit and taking the Comcast approach.
Anyhow here’s the stocks for each:
AT&T shareholders seem scared, probably due to regulatory risk and price tag. Time Warner shareholders seem happy and optimistic about a TWX investment. Could be a home run for both stocks.
In August, Samsung released their highly anticipated Galaxy Note7 smartphone. They quickly flew off the shelves and reviewers went mad. Then in just two short months, the Note7 died and Samsung has a pretty deep wound to heal.
In just two weeks, reports started to flood in that Note7 smartphones were smoking, catching fire, and exploding. This prompted Samsung to stop shipments and look into the issue. Samsung then realized they were going to have to replace all the Note7s they sold and issue a recall. While Samsung is in problem solving mode for this, the FAA urged passengers with a Note7 not to fly, or make sure the device is turned off while aboard an aircraft. This is just the start of the wound.
Samsung rolled out their replacement Note7s in September, but it seems as if they didn’t even fix the problem, because even the replacements would blow up. This shock came about when a replacement Note7 exploded on board a Southwest flight that was still at the gate.
This all prompted each carrier: Verizon, Sprint, AT&T, and T-Mobile to start offering exchanges and replacements. Even though this was Samsung’s problem it still had an affect on the carrier’s customers who didn’t have phones anymore. Eventually they all suspended sales of the Note7.
Samsung finally pulled the plug this week on the Note7 and cancelled the Note7 entirely. According to a Mashable article, Samsung was unable to actually identify and replicate the issue that was causing the Note7 to explode. This is probably why Samsung killed off the Note7, because if they can’t even identify the problem, they can’t solve the problem.
Here is a quick video from Fox Business discussing the Note7’s discontinuation:
If you’re a Samsung fan, this may make you angry or worried, but Samsung is offering you $100 to stay with Samsung devices, per New York Post.
If you’re Samsung, you should be angered and worried. This caused Samsung’s stock in KRX (Korean Exchange) to plummit, but as of Friday (10/14), it seems to rebounding.
It’s been a rough week for Samsung all around, that’s no doubt. Per Fox Businness, Samsung also cut their quarter 3 profit outlook due to the Note7 fiasco.
Well, Samsung may not be happy, but this sure makes companies like Apple, LG, HTC, and other competitors very happy. Consumers will more than likely leave Samsung for one of those companies, and Apple would probably be the go-to for most. If these companies really wanted to take advantage of this they’d promote and advertise against Samsung while still for their product(s).
On the flip side, Samsung needs to stitch this wound and heal. They already started that by offering customers $100 in credit no to switch from Samsung, but they need to do more. Samsung needs to promote their other phones, regular S7 and S7 Edge, and also discount them. Samsung should bring all carriers to the table to help them advertise and promote those devices and basically bury the Note7 for good.
Samsung is one of the biggest name in the mobile device industry, and electronics in general, and they need to handle this like a market leader would. Samsung makes great devices all around, they just had one of those backfires with a faulty product. Now not knowing why or how the Note7 did what it did to cause its failure isn’t the best thing for a company, but Samsung did the right thing by discontinuing the Note7.
Samsung needs to reassure shareholders and stakeholders, that Samsung is going to rebound and that the Note7 fiasco was just a bump in the road, and that their past it. Like stated above, their competitors are licking their chops at this, but I believe that will be short term, however Samsung;s big partner Google is really licking their chops.
Samsung mainly uses Android for their smartphones, and Android is created by Google, and Google just launched their own smartphones called Pixel. If Google plays their cards right, which they probably will, they’ll use this Note7 fiasco to really push their sales and make the case of Pixel. However Samsung may not like that, but I don’t think they can afford to say if, and, or but to Google. Although Samsung does have a mobile device operating system of their own called Tizen, but it has barely been rolled it out on their devices across the world.
Samsung should and shouldn’t be worried overall, they should be worried because this gives their competition and edge and it’s a let down for their stake and shareholders. They shouldn’t be worried because the issue was only limited to the Note7, and with their brand power, Samsung should have no problem rebounding and making up lost cash. Keep using your Samsung devices, and don’t be discouraged from staying with Samsung or buying Samsung devices.
In 1969 the US Depertment of Defense Defense/Advance Research Project Agency created what would become the Internet we all love and know today, it was called ARPANET. Created to keep ongoing government communication after a catastrophic nuclear attack knocking out all land based telecommunications, ARPANET was a major milestone in not only the military, but technology in general. Little did its creators know what it would eventually turn into.
Using this technology, and creating new tech along the way, the Internet became fully commercialized in the US by 1995. Before then the US government had a strong grasp on the Internet, but in the present day the Internet is as we know, open and free. Anyone who has connection to this beautiful technology can do whatever they please, legal or illegal (until you get caught). Although it seems many people are running into censorship problems by companies that run websites and networks on the Internet, mainly conservatives and those critical of government. This is the road I'm going down.
There is this not so little non-profit organization called ICANN. ICANN mainly controls and manages Domain Name System and Internet Protocols around the globe, which is a lot already. This organization is a direct result of a proposal from the US National Telecommunications and Information Administration, a sub-division of the US Department of Commerce. Known as "The Green Paper" NTIA called to privatize the management of the Internet Domain Name System, and in 1998 along came ICANN.
Now from the moment of ICANN's creation to present day, the US has maintained authority over ICANN in a Memorandum of Understanding between the US Department of Commerce and ICANN. President Barack Obama is about to shred this deal, and let ICANN do whatever they please and are in a way "for sale". This is leaving many to worry the UN, EU, China, or even Russia will make a deal, or multiple, with ICANN. Trust me there is plenty of reasons to be worried.
The UN would be the most likely to assume authority, or make some deals with ICANN, and those deals could ruin the Internet we know and love today. ICANN can control nearly any website and any server connected to the Internet, and the US constitution and values have long protected users, innovation, and creativity on the Internet, and let's not forget about cyber security.
Other nations may and could influence censorship and biased algorithms throughout the Internet and there will be nothing the US can do about it. As you know some nations hate the idea of an open and free Internet such as: China, Russia, Iran, Turkey, and a few nations in the EU are catching on slowly, but surely like France and Germany. The EU has already made several antitrust cases against US companies that operate websites and networks on the Internet, and some fear more will follow once the US cedes control of the Internet. A new memorandum of agreement will probably be drafted, if this transition is done, between ICANN and the International Telecommunications Union.
The ITU is the UN's NTIA. Simple as that.
Why should we as Americans want other nations influencing the way we experience the Internet? We'll have no say in it, we'll juts have to accept it how it is. The US controlling the Internet now has always protected the freedom of the Internet.
Listen I know, the Internet spans the globe, but why cease control of it to the globe when it's already controlled by the land of liberty? Let nations to continue to decide for themselves how the run the Internet in their country, and not have the power to push that influence on others.
As much as I hate to say it, after what he did to Trump at the Republican Convention, but Ted Cruz may be our only voice to stop Obama. Congress can act to block Obama's plan if they can get enough votes to do so. It looks good on the GOP side, which I see no reason why any GOP congressman would not vote for it. Unless they're the typical cucks that really don't care and have the companies lobbying for it in their pockets, that's always a problem. 99.9% of the time the democratic congressman love wahetever Obama proposes.
Here is Ted Cruz making the case at the Protecting Internet Freedom Subcommittee Hearing:
I mentioned companies that lobby for this above, and the ones that do shouldn't really surprise anyone. Twitter, Facebook, and Google have urged congress, in a signed letter, to support Obama's plan, and all three of them have one thing in common, censorship. It's like it's all connected to the globalist elite agenda, and the biggest medium to share and create ideas is the Internet. The letter from the companies, according to Reuters, said "it's imperative" that Congress let's Obama cease authority of the Internet. That is fishy if you ask me.
Other companies that signed the letter were: Amazon, Cloudflare, Yahoo, and several other technology trade firms according to Reuters.
Sadly, it's all in the hands of Congress now, because Obama is going to pull the trigger on this if left unchallenged. Another sad thing is, like a bullet, once you pull the trigger and shoot you can't get it back, and I mean if Trump gets elected I don't think there will be anything he can do to get the Internet back. With Trump though, anything for America is possible.
This is not a good thing, with something as big and powerful as the Internet, which has been protected by the United States since it's birth is about to be absorbed by globalist forces. To think ICANN is going to stay neutral is a stretch in the type of world we live in right now, but it is possible nothing will happen, and if Congress can't block this, then that's all we can rely on, is hope.
We must hope that Ted Cruz, the GOP, and any uncucked Democrats block this transition. The globalist elites on both sides of the aisle need to get on board and realize the risks of this transition. That is the thing too, there is no actual benefit to the US or really even the globe. When ICANN came about due to the NTIA's proposal in 1998, the US has kept authority over ICANN and the Internet, and the Internet has been a free, open, and creative place for all in any nation that allows it that way. Why give it away if there is no reason to do so?
President Obama needs to listen the people on this matter too, and not the special interest groups that want this to happen. After all he is the president for the people by people. A recent Rasmussen Reports survey found that the majority of Americans oppose this move, but to think Obama cares about the American people is a joke within itself. Another poll, conducted by Breitbart/Gravis found only 14% support the transition while 41% do not support it.
Our great nation invented this great piece of technology we call the Internet, we are the reasons ICANN exists, and to just give it all up without even a debate or discussion about it, is not only wrong, but very suspicious. It just seems like something is going on here. We're going to have to sit and see what happens, and if the worse does happen, all we can do is hope that nothing changes.