PACIFIC ? The Future of Media Isn't Media

pacific att time warner department of justice

What’s Next: The End of Media: If Federal Judge Richard J. Leon rules in favor of AT&T’s $85-billion Time Warner purchase tomorrow, the idea will affirm that will technology, media along with telecom are all competing from the same arena along with, pending appeals, could give tech along with telecom giants the green light to pursue a slew of major media acquisitions.

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The Big Picture: the idea is usually entirely possible that will tech along with telecom companies will own all existing media companies, including Disney along with Netflix, from the not-too-distant future. When we launched PACIFIC just over three months ago, a Hollywood media executive told us he believed that will just eight companies — Alphabet, Amazon, Apple, Facebook, AT&T, Charter, Comcast along with Verizon — would likely own all US media within the next ten years. We’ve put that will theory to several Silicon Valley along with Hollywood execs since then, along with all of them either agree or say the idea is usually entirely within the realm of possibility.

from the more immediate future, Judge Leon’s approval of the deal would likely usher in a slew of mergers along with acquisitions involving some of the smaller fish:

• Comcast vs. Disney for 21st Century Fox: Brian Roberts is usually likely to announce Comcast’s rival bid for 21st Century Fox This particular week, sources close to the matter tell me. The bid will be north of $60 billion, they believe, at least 15% higher than Disney’s $52.4-million bid.

• T-Mobile along with Sprint: John Legere has offered to buy Sprint for $26 billion. The deal would likely bolster T-Mobile’s ability to compete against AT&T along with Verizon, the dominant wireless providers from the US.

• Hollywood studios like MGM, Lionsgate along with Sony may all consider mergers in order to scale up along with compete with bigger companies. CBS along with Viacom may revisit a merger, despite opposition coming from CBS chief Les Moonves.

Plan B: If Judge Leon blocks the AT&T-Time Warner deal, the idea will likely put a freeze on M&A activity across industries along with force tech, media along with telecom companies to rethink their growth strategies.

Welcome to PACIFIC, along with welcome to the brand-new Hollywood, which runs coming from Culver City to Los Gatos to South Lake Union. With the AT&T/Time Warner news coming, today’s newsletter is usually focused on the intersection of tech along with media, where there’s already a ton of news This particular week.

Fun fact: Amazon Studios’ brand-new chief Jennifer Salke today flies to Amazon’s headquarters in Seattle roughly once a week, per NYT. Some advice: Sit on the right side of the plane going up, along with the left side coming back. that will way you get to see Mt. Rainer along with Yosemite every time.

Fast Lanes: The end of neutrality

The FCC has officially repealed net neutrality as of today, which means internet service providers can today charge fees to provide faster service for companies that will are willing to pay more.

• FCC Chairman Ajit Pai says the move will “protect consumers along with promote better, faster internet access along with more competition.”

• Opponents say the idea will allow providers to block websites, censor content along with disadvantage the people along with companies who can’t afford to pay a premium.

• Washington State is usually today the only state with net neutrality, after Gov. Jay Inslee signed a law effectively replacing the federal rules.

What’s Next: “The battle is usually just beginning,” via WaPo’s Tony Romm: “Pai must still contend having a challenge to his efforts in federal court, a campaign on Capitol Hill to roll his improvements back along having a slew of states that will are looking to regulate from the FCC’s place.”

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Talk of Tinseltown: Amazon’s Lord of Hollywood

What’s Next: After years of tiny-budget niche projects, Amazon Studios is usually unveiling its plan to produce big-budget blockbusters, including “Lord of the Rings.” The goal is usually to capture national attention, a la Netflix, along with drive Amazon Prime subscriptions.

brand-new Amazon Studios chief Jennifer Salke has gone full court press with interviews from the brand-new York Times, Bloomberg, The Hollywood Reporter, Deadline, along with Variety:

The Through Lines:

• Amazon has money: With an estimated $4.5 billion spent on programming last year, Amazon Studios is usually spending heavily on talent along with content rights. “There is usually a lot of talent out there looking for a home,” Salke tells NYT. “We hold the resources.”

• Amazon has ambition: Bezos said he wanted the next “Game of Thrones,” along with Amazon Studios came back with rights to “Lord of the Rings,” which cost them $250 million. Salke says the deal closed last month along with she’s currently talking to writers.

The Big Picture: Amazon, Apple along with Netflix are spending billions on talent along with content along with radically driving up the cost of business in Hollywood. They are also pursuing major tentpole projects — the next “Game of Thrones” — to make their platforms essential to consumers.

Bonus: Amazon Studios has made a straight-to-series order for an anthology based on the brand-new York Times’ well-known Modern Love column.

What Hollywood is usually Reading

“Vice Media Was Built On a Bluff” by NYMag’s Reeves Wiedeman: “For almost 25 years, Shane Smith’s plan for Vice was that will, by the time the suckers caught on, he’d never be stuck owning the company he co-founded.”

The Stream: How Netflix wins

“Inside the Binge Factory: Netflix is usually hiring everybody in along with out of Hollywood to make more TV shows than any network ever has, along with the idea already knows which ones you’ll like,” by Vulture’s Josef Adalian:

• “Netflix operates by a simple logic, long understood by such tech behemoths as Facebook along with Amazon: Growth begets more growth begets more growth.”

• “When Netflix adds more content, the idea lures brand-new subscribers along with gets existing ones to watch more hours of Netflix. As they spend more time watching, the company can collect more data on their viewing habits, allowing the idea to refine its bets about future programming.”

• How Netflix’s Ted Sarandos sees the idea: “‘More shows, more watching; more watching, more subs; more subs, more revenue; more revenue, more content.'”

The Big Picture: “Netflix has gone coming from around 33 million global subscribers before House of Cards premiered to over 125 million today. Wall Street analysts have predicted Netflix could flirt with 0 million subscribers by the end of 2020; by 2028, one Morgan Stanley analyst has said, 300 million is usually possible.”

The Bad Picture: “Netflix doesn’t actually make any real profits right today because of the billions in debt the idea’s taking on as the idea builds up its library.” Netflix has more than $6 billion in debt along with at least $15 billion in streaming content obligations.

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Future Uncertain: What’s next for Hulu

Whoever wins 21st Century Fox will also get control of Hulu. The Information’s Tom Dotan wonders whether Disney or Comcast will be willing to shoulder Hulu’s losses to keep the idea competitive with Netflix:

• “Hulu’s losses have ballooned in recent years—up 140% to $436 million from the first quarter alone.”

• “Hulu’s cash burn is usually approaching half of Netflix’s. Yet Netflix has about six times as many subscribers along with is usually expanding globally, whereas Hulu is usually a US-only service, which means Netflix has more opportunity to recoup the investment.”

• “Traditional media companies historically have been hesitant to invest heavily in digital startups … Hulu offers Disney or Comcast a chance to change that will narrative along with become more competitive in an entertainment sector dominated by internet services.”

Valinsky’s Links

Bozoma Saint John heads to Endeavor (Recode)

Scooters solve Segway’s problem (Bloomberg)

Tesla gets set to update Autopilot (Reuters)

Snap takes over Santa Monica (TMZ)

Podcasts stay tiny (Recode)

Future of Groceries: Whole Foods, one year on

My colleague Jordan Valinsky emails:

the idea’s been nearly one year since Amazon’s surprise purchase of Whole Foods. The $13.7 billion deal is usually upending the grocery industry along with forcing its rival to retool how they do business.

The Big Picture, via WSJ’s Heather Haddon:

• “Grocery chains have accelerated planned investments in online delivery along with pickup services, in some cases bumping plans ahead to two- to three-year timelines instead of all 5 to seven years.”

• “Dozens of supermarkets have struck deals with Instacart Inc., an online grocery-delivery service that will has expanded to more than 0 retailers coming from 30 before Amazon’s deal.”

• “Kroger along with Walmart along with Target have all stepped up e-commerce acquisitions, with more technology investment expected.”

What’s next: Amazon is usually continuing to roll out its Whole Foods perks program to Prime members, entering 10 brand-new states on Wednesday along with going nationwide This particular summer.

Bonus: Amazon wants to crush La Croix.

What next: “coming from In-N-Out to Chateau Marmont, Anthony Bourdain understood what makes L.A. great,” by LAT’s Jenn Harris.

See you tomorrow.

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sy88pgw (brand-new York) First published June 11, 2018: 3:23 PM ET

PACIFIC ? The Future of Media Isn't Media

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