Whether it is Verizon, Comcast, AT&T or other telecom and cable operators, these service providers are essentially doing the same thing — delivering content to consumers for a fee.
Amid fast-changing technology, they all face the risks of consumers switching to other channels to get their favorite drama or sports and music programs.
As distributors, owning content is the only secure way. Comcast clearly knows that.
In 2013, Comcast spent US$16.7 billion to acquire NBC Universal. Earlier this year, it bought DreamWorks Animation.
In this sense, AT&T’s US$85 billion takeover bid for Time Warner is simply another deal under the trend for distributors to own the content, too.
What is the message for investors? Do as AT&T does.
Investors should probably snap up quality content owners now and wait for someone else to make an aggressive offer. Netflix is one good target.
(Editor’s note: Netflix is driving toward boosting the share of original productions to 50 percent in the next few years, chief financial officer David Well said. In 2016, Netflix expects to launch 600 hours of original programming, up from 450 hours in 2015.)
With a market value of US$55 billion, Netflix is cheaper than Time Warner before AT&T launched the bid.
The full article appeared in the Hong Kong Economic Journal in Chinese on Oct. 27
Translation by Raymond Tsoi
[Chinese version 中文版]
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