News
Verizon buys a chunk of AwesomenessTV and is then linked with Yahoo, while T-Mobile bolsters Binge On.
I have never watched Game of Thrones. Nor have I read any of the books. There, I said it.
I realise, based on the number of adverts and references to it in other shows, and the frequency with which it crops up in conversation with people who do watch it, that I am probably in the minority.
What I have gathered from these secondary sources is that Game of Thrones centres on a big power struggle that is chock full of gratuitous sex and violence. All of which makes it sound like most other long-running, big-budget TV shows, only this one has more dragons and magic in it. But what do I know? I haven’t seen it.
Perhaps I don’t need to; after all, I spend my days trying to keep up with the ongoing power struggle in the telecoms industry over who owns the customer.
On the downside, the battles themselves rarely get more exciting than a few pointed remarks about a rival, either in an interview or on Twitter; but on the upside, there is much less incest – hopefully anyway.
This week saw significant developments in the escalating battle for content supremacy among U.S. mobile operators.
Sources cited by Bloomberg late on Thursday claimed that Verizon is preparing to launch a takeover bid for Yahoo’s core Web business and is also considering an offer for its Yahoo Japan stake.
Under pressure from activist investor Starboard Value, Yahoo is courting potential suitors and has reportedly given interested parties until 11 April to table their offers.
According to Thursday’s Bloomberg report, Verizon and its AOL subsidiary are working with at least three financial advisors on a Yahoo bid. Sources claim Verizon would replace Yahoo CEO Marissa Mayer with AOL chief Tim Armstrong and Marni Walden, Verizon’s president of product innovation and new businesses.
It remains to be seen whether Verizon really is preparing an offer for Yahoo, but usually there is no smoke without fire, and the amount of detail in the report constitutes a fair bit of smoke.
Acquiring Yahoo would be entirely consistent with Verizon’s media strategy, which centres on building up a portfolio of compelling content and ramping up its advertising capabilities. It’s a strategy that kicked into overdrive with its 2015 acquisition of AOL for $4.4 billion.
Verizon this week also acquired a 24.5% stake in DreamWorks Animation-owned AwesomenessTV, which makes content for millennials and generation Z – in other words, people younger than you…and me.
Under the agreement, which values AwesomenessTV at $650 million, Verizon has agreed a multi-year deal to fund a premium, short-form mobile video service in partnership with AwesomenessTV that will be distributed via Verizon’s go90 mobile video offering.
T-Mobile US has also been busy in the content space this week.
On Tuesday, the operator announced 16 new partners for its zero-rated music and video services, Music Freedom and Binge On respectively, increasing the total to more than 100.
At this point I would normally quote the always-colourful T-Mobile CEO John Legere, but he used the word ‘uncarrier’ too much, which violates the taste and decency section of our house style rules.
To paraphrase in my own parlance, Legere thinks giving access to music and video without it counting against a customer’s data allowance is nothing short of righteous, and something you’re unlikely to see from the likes of AT&T and Verizon, which are both seriously uncool – do kids today still use the word ‘cool’?
Of course, sat atop the Iron Throne of content like a chirpy version of Ned Stark is AT&T, which thanks to its DirecTV arm is a major player in the content game.
Unlike Verizon and T-Mobile, which are establishing themselves as convenient channels to compelling content that is already online, AT&T is taking a traditional TV service, for which it paid $48.5 billion, and repackaging it for an online, mobile audience.
Indeed, AT&T is preparing to launch no fewer than three online TV services this year: DirecTV Now, DirecTV Mobile, and DirecTV Preview. Each one is pitched at a different type of consumer, from the dedicated viewers with money to spare to the casual audience that only wants to dip in and out, and is not prepared to pay much, if anything at all, for it.
AT&T and Verizon can of course cross-sell and integrate their mobile and online TV services with their traditional, living-room based TV services, while T-Mobile is strictly about providing value to younger, cost-conscious consumers.
Where does that leave Sprint?
Well, if this week is anything to go by, it leaves Sprint selling certain network assets and leasing them back, freeing up billions of dollars in cash that will help to keep the lights on while it tries to turn things around.
The operator is saddled with a hefty $33.75 billion debt, and $3.68 billion of that will mature in fiscal 2016.
Sprint is well-and-truly focused on value, and while it does not have a content play, it no doubt hopes that video-hungry mobile customers will be attracted to its slightly-less-expensive unlimited data plans.
This might be good enough for now, but with Cisco forecasting that video will account for three quarters of the world’s mobile data traffic by 2020, arguably no mobile operator can afford not to have a long-term video strategy.
Ideally this particular Friday Review would end with an exceptionally apt Game of Thrones quote, but my not watching it makes that extremely difficult.
"Winter is coming." Is that at all relevant?
