AT&T/Time Warner
update
Interest
add-on to last week’s blog post – following the AT&T/Time Warner merger the
combined firm has announced that they will be offering a narrow bundled product
to AT&T subscribers, with content limited to entertainment content from
their Turner business.
Two additional interesting comments of note from their CEO Randall
Stephenson:
1 - They will focus on increasing advertising and plan upcoming acquisitions
to enhance their ad ability
2 - They see opportunities in the over-the-top, OTT market
Combining the two points, I see a
future where this large firm is an important competitor in the streaming space,
where they offer subscription-based or advertising-based revenue models. Offering
this flexibility to consumers, coupled with their strong content arsenal and
their ability to offer bundled products should prove positive for the firm’s
growth and profitability. Also with their view of advertising, I think they
will move ads more towards the bespoke ad model we see with YouTube ads, which
have higher ROI and track-ability than the black hole of traditional TV ads.
As part of their advance into the
streaming space, AT&T/Time Warner has announced their intent to buy Otter
Media, a firm specializing in internet streaming.
This move seems to be more about buying the technology and
repurposing for existing content rather than simply to own the platform as it
now stands. Otter specializes in internet though also mobile-friendly content,
which fits nicely with the thesis of AT&T/Time Warner seeing the future in
mobile consumption.
Google Podcast app
Separately, Google recently announced they would be
releasing an updated Podcast app, which is expected to release some energies in
this unique listening channel. They also plan to incorporate smart
recommendations, which should play to the theme of digital promoting
consumption of long-tail, niche content.
While this might seem isolated from the AT&T/Time Warner
deal, its related in that it highlights the intersection of content and
distribution hub. There is clearly a trend emerging of owning the entire
vertical content-based businesses.
Ocado update
In an earlier post I explored the deal between Ocado and
Kroger, where Ocado was going to partner with Kroger to offer a digital platform
enabling remote ordering and distribution. It turns out that Ocado is being
viewed by the market as housing valuable logistical distribution technology
that could be applied to different types of delivery markets. I want to mention
as this runs counter to the theme of owning the entire vertical (at least until
a big name buys them), where they could serve as the distribution operating
system for firms that don’t have an internally grown online-to-distribution
model. There is clearly a market for such intermediaries to step in and gives
the midmarket and smaller firms a fighting chance. Ultimately, such
intermediaries should result in a healthier ecosystem where smaller firms are
allowed to exist.
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