Mega Media Mergers to fight against Netflix

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  • Discovery Communications is acquiring Scripps Networks Interactive for $11.9 billion in a deal expected to boost the company's negotiating leverage as pay TV operators lose subscribers and it seeks new audiences.

    US billionaire and arch rival to Rupert Murdoch, John Malone, has added another notch to his belt as he continues his drive to create a gigantic worldwide entertainment and communications company to take on Disney, Time Warner and Murdoch's 21st Century Fox in the face of the increasing threat posed by streamers such as Netflix and Amazon. Malone controls Discovery.

    Both Discovery and Scripps make a huge sway of the satellite and cable tv channels we see on our screens and Scripps owns half of UKTV, the multi-channel joint venture with the BBC.

    Discovery tried to buy a 50% stake in UKTV from Virgin Media in 2011 when VM put it up for sale, but VM sold the stake to Scripps instead. Virgin Media is owned by Liberty Global which is also controlled by John Malone. It's like knitting, this.

    John Malone has been spending recent times merging three American cable companies together to create Charter, the second largest cable company in America after Comcast. Before that, his various companies bought a stake in Lionsgate, the American film company responsible for films such as the Hunger Games films and tv shows like Mad Men. Eurosport and QVC are ultimately controlled by Malone too, as was premium US cable channel Starz. Lionsgate bought Starz last year.

    Rumours are still abound that Liberty Global will merge with Vodafone to create a communications giant. If that happens, I expect John Malone will then knit all his various interests together to create a global entertainment and communications behemoth which he could then sell onto someone like Apple, Amazon, Google or another like Disney, or keep for himself.

    Malone is in his 80s and he has previously indicated that he would like to do one last round of consolidating, then sell. He's sticking to his word!

    UKTV operates the following channels in Britain:







    Good Food



    and their time shift and HD variants.

    These are the channels that Discovery run here:

    Discovery Ch

    Animal Planet


    Quest Red


    Investigation Discovery

    Discovery History

    Discovery Science

    Discovery Turbo

    Discovery Shed

    Home & Health

    and their time shift and HD variants.

    In Britain, Scripps operates these channels:

    Food Network

    Travel Channel

    In America, Scripps also operates these channels:

    HGTV - Home and Garden TV.

    DIY channel

    Cooking Channel

    Great American Country

    Fine Living


    Asian Food Channel

    As you can see there is a lot of cross over and with the ever increasing popularity of on on-demand services like Netflix and internet video services like Youtube, I would not expect all of these channels to survive post merger, which will be completed next year.

    American cable companies are already starting to offer what they call "skinny" bundles of channels, that is smaller packages of channels, sometimes only containing 10-20 channels each. I would expect to see this here at some point and this merger may accelerate that process.

    Media Trivia:

    12 years ago Malone almost bought Murdoch's company right out from under him, but following tough negotiations, Murdoch sold his satellite tv business, DirecTV, to Malone in exchange for Murdoch retaining control of his main News Corp Company. This ended Murdoch's long held dream of creating a global satellite tv company. He already controlled Sky and Asia's Star TV.

    Lesson to be learned: stay out of the way of these media mogul grandads or you'll get flattened.:)

    In the early 90s in America, just before the creation of DirectTV, an attempt was made by Murdoch and others to create a digital tv company, it was called Sky Cable. Join the dots...;)


    This merger is happening because Malone wants to create a large enough company which can compete with the likes of Disney, Time Warner and especially streaming services like Netflix and Amazon. Will he succeed?

  • Murdoch to sell to Disney??

    Walt Disney and Rupert Murdoch's 21st Century Fox shares surged on Monday after reports that Fox has discussed selling "most" of its business, including its Sky stake, to Disney.

    Fox leaders want to focus on sports and news, according to CNBC, which first reported the story.

    This could be another huge media merger, if it happens.

    Netflix is spending billions on what they call content, what we call tv shows and films and although late to the game, so is Amazon.

    Amazon is huge, so big, that if they decide they are going to do something, there is a very good chance that they will will totally dominate at it.

    Rupert Murdoch may be an elderly media mogul, but he's still one of the most powerful people in the media world and very shrewd. He must be utterly, utterly sick at what Netflix has achieved in such a short time frame, which is an entertainment company that is truly global and controls much of the content that it shows and distributes it on its own "platform."

    Murdoch spent much of his adult life trying to achieve the same thing, primarily by his long held aim of creating a global satellite tv company. Sky was part of that goal. Star TV in China, was meant to be the main Asian part and Direct TV in America was meant to be the other main spoke of a global satellite and entertainment company. These failed, not the companies, but Murdoch's control of them.

    John Malone, a major competitor to Murdoch, was responsible for Murdoch's loss of DirectTV. Malone almost got control of Murdoch's own News Corp company and Murdoch was forced to sell Direct TV in exchange for Malone's shares in News Corp. This began a downward spiral for Murdoch that never really abated and continues to this day with all the sex scandals at his Fox News channel.

    In 2014, Murdoch made a bid for Time Warner, one of the other "Big 6" Hollywood studios, but this bad failed. At the time, I thought this was a very aggressive move by Murdoch, but in light of various share buy backs and Murdoch's intention to purchase all of Sky, this all seems part of a pattern to make his own company more easier to buy.

    Netflix isn't going away any time soon and Amazon has its ever growing Prime tv service. The American cable giant Comcast now owns NBC Universal and AT&T, the once former monopoly telephone operator in the States, reinvented itself since its mandated breakup and has in effect reconstituted itself again as a major cable/telecoms company. It then bought Direct TV and is at an advanced stage to purchase Time Warner.

    The merger of Hollywood with tv networks with cable/satellite/telecoms/mobile companies is not slowing down, it's accelerating. This is called "vertical integration" which means that everything along the chain is controlled by the same company, so the company that makes the tv show and film, also controls the way that this content is distributed too.

    I expect John Malone, ultimate owner of Virgin Media and Discovery and a major shareholder in American cable tv company Charter, will do more deals possibly involving Vodafone and create another vertically integrated global media/telecoms behemoth .

    The other two main Hollywood studios Paramount owned by Viacom (sister company to CBS) and Sony (Colombia), may eventually do a deal with each other or someone else like Patrick Draghi's Altice company to create another gigantic media/telecoms behemoth. Murdoch may see that's he's eventually being squeezed out of a market he was once very dominate in. I haven't even mentioned Chinese or Indian companies here. I expect they will all eventually join up with the "American" companies, if the regulators allow it.

    Disney has major brands like Star Wars, ESPN and Mickey Mouse, Time Warner (soon to be part of AT&T) has CNN, HBO and Harry Potter, where are Murdoch's big brands?

    A few years ago, the six main Hollywood companies were talking joint ventures to create their own Netflix, but they never quite got there. Four of them did form Hulu, but it is struggling against the likes of Netflix. These joint ventures were widely seen as a prelude to a consolidation in Hollywood reducing the Big 6 down to perhaps four or even three companies.

    I have made no mention, thus far, of another two giants Apple and Google, who are are also moving their tanks onto the traditional media territory....

    Is Murdoch throwing in the towel needlessly here, or is he doing the sensible thing and trying to sell out before the likes of Disney, Netflix and Amazon make him go bust?

    In the future, would you mind if all tv, films, news was owned and controlled by a handful of companies like Amazon, Google and Disney?

  • The Walt Disney company has ended its ban of the Los Angeles Times newspaper after a backlash from US media.

    Last week it emerged Disney had stopped inviting the newspaper to press screenings because it disagreed with an article published in September.

    This is a good example of what happens when companies become very powerful, in that if you criticise them, they ban you.

    I suppose a future way for Disney to neutralise newspaper complaints is to buy the newspapers...

  • Well, you may be right there, Ron.

    Some media and business pundits are saying similar things to you. They think this is about about whether Murdoch is allowed to get full control of Sky, see the separate thread on this, and this "sale" maybe a smoke and mirrors exercise, as you say or Murdoch will sell the bulk of Fox if he doesn't get control of Sky.

  • This is a good example of what happens when companies become very powerful, in that if you criticise them, they ban you.

    I suppose a future way for Disney to neutralise newspaper complaints is to buy the newspapers...

    It's also possibly a good example of what happens when a company becomes increasingly successful, therefore inevitably big, therefore perceived as powerful, consequently and unthinkingly accused of wielding an abuse of power.

    What happens is that the world-weary founder , who is getting on in years, decides the game isn't worth the candle, that world order is crumbling, that popular democracy has a raging antipathy towards capitalism and that the probability of a global slump - or at least one in the West - has advanced from amber to orange.

    Two quite excruciatingly written fiction books by Ayn Rand - The Fountainhead and Atlas Shrugged - are looking to be extraordinarily prophetic on the shape of things to come

  • I think your analysis of why Murdoch is throwing in the towel is extremely well informed and perceptive. A shining example of how a forum can reach the parts that newspapers can’t touch.

    Murdoch’s empire got big the traditional way, before the rate of change in communication and entertainment became so faddish and youth-oriented that it would make a giant mature corporation’s head spin.

    I am sure Mr Murdoch and his empire feels increasing out-of-sorts with today’s and tomorrow’s communications and entertainment industry. I don’t think it was ever in his nature or desire to develop his empire in that direction. Even if it had been his desire in later years to pursue new modern directions, the opprobrium he and his empire received for becoming so successful, big and powerful, which was mostly mean spirited, political and, with very few exceptions, undeserved, must have caused him to think to hell with it and to hell with them.

    Although I also wonder whether, once he has offloaded the stuff that he thinks has reached a plateau he might use the proceeds, leveraged with his existing company assets, to perform an unexpected master stroke and be back in the game. That Last Hurrah beckons.

    You ask at the end of your fab discourse would we mind if all TV, films, news was owned and controlled by a handful of companies like Amazon, Google and Disney. I can’t think of any reason why we should mind. The number of main players is well in excess of being anti-trust or a colluding monopoly. What they are selling is not a compulsory purchase. Sales success is governed by our willingness to buy. If the public gets addicted to cheap but poor value pap and the audience pursuit of good quality news, entertainment and social media falls by the wayside, then where does the blame lie? The audience gets what they deserve.

    Actually the news, entertainment and social media markets seems fairly well segmented these days. Take TV for example, where there are far more quality programmes than ever before, along with a generous helping of programmes to cater to a mass of ignoramuses.

  • Murdoch is clever.

    Whether he could've predicted the internet in the future, I don't know.

    Before Direct TV, there was another earlier company in America in the late 80s, early 90s, it was called Sky Cable. You can guess who was involved in that.

    Murdoch didn't want to get into the satellite business, but he was short of options, especially as his arch rival, John Malone, controlled vast swathes of American cable systems at the time and is doing so again now, decades later.

    The Last Hurrah is interesting, you might be right, but the numbers don't add up. Amazon, Apple etc are far, far bigger fish in the pond which is quite ironic, because Murdoch used to be pretty much the largest fish in the pond, then the pond changed and got much bigger and became a lake.

    I think you're dead on with your last paragraphs. No one is forced to buy Netflix, unlike having to fork out for the BBC. The quality of some of these programme on the on-demand systems far outweighs "Come Dine With Me" or "Big Brother" or whatever other crap is on mainstream telly.

    Things always go in circles, but I agree, if people watch crap, then crap is what will be shown. Why bother making a drama when you can stick a smug Simon Cowell on a tv show and make dosh the easy way?

    We're in a "shift" in communications and media at the moment and the way the American giants are organising themselves will show the rest of the world how its done.

    At the moment there is a lot of "cord cutting" in the States as Americans ditch their traditional tv packages from their cable companies and switch to streaming services such as Netflix. But you still need a "cord" aka access to the internet, but that won't even be through cable tv/telephone lines/fibre connections soon. It will all be mobile and probably get pumped out from your local street light instead

    The world is changing and Murdoch doesn't want to be surfing the waves when the waves eventually crash upon him, he wants to be sitting on the beach watching all the surfers instead. He's no fool, he wouldn't be a billionaire otherwise.

  • This is a good example of what happens when companies become very powerful, in that if you criticise them, they ban you.

    I suppose a future way for Disney to neutralise newspaper complaints is to buy the newspapers...

    I think the real problem for Anheim local is the same real problem we have in the UK. Anheim are saddled with an ineffective local government who don't know how to bargain effectively with Disney and have councillors who will vote for a fast- buck easy option. Inevitably they will get rolled over by Disney.committee that well and rolled over by Disney

    We in the UK have an ineffective National government who don't know how to bargain effectively with the EU and have MP's who would rather have a bad deal than no deal. Inevitably they will be rolled over by the EU.

    Of course, Disney and the EU are horrid organisations in so many ways. But neither are Anheim's local government nor Britain's national government anything to write home about.

  • The link from the BBC story to the Anheim one was a interesting one.

    The local council paid for Disney's massive car park out of tax payer's funds yet Disney pay only a dollar a year in rent. Something is clearly wrong and as you say its saddled with people who don't have the skills to stand up to and bargain with a large corporation.

  • Rupert Murdoch’s relationship with his younger son James is being called into question in the aftermath of the revelation that his company 21st Century Fox was considering selling its film studio and stake in Sky to rival Disney.

    The potential sale of Fox has already been interpreted by financial analysts as a recognition by the Murdochs that the company is not large enough to compete in entertainment with global technology giants in an era of streaming media.

    Reports that 21st Century Fox is willing to sell most of its assets may indicate the media clan are backing away – or is it just a way to achieve their dreams of scale?

    A couple of recent Guardian articles there suggesting that internal feuds among the Murdoch's maybe the reason for the sale and the next article is suggesting that it's all a smoke and mirrors exercise. Murdoch is not serious about selling his company, quite the opposite.

    As that second article goes on to say, it was only earlier this year that Murdoch tried to buy Time Warner who rebuffed him, so this "putting up the sale sign" maybe just a game to make Time Warner come back to the table especially as the American regulators are not happy about AT&T's takeover of Time Warner.

  • Quote

    Comcast has approached 21st Century Fox and expressed interest in an acquisition of some of Fox's assets, sources said Thursday.

    Talks are ongoing, a source said.

    Comcast is interested in the same set of assets that Disney approached Fox about earlier this year, sources said. Also of interest to Comcast is acquiring the international assets of Fox, given that the Philadelphia-based company is heavily concentrated in the U.S.

    Just when I thought that Murdoch was just playing games about selling most of his company, this story pops up.

    Comcast, for those that don't know, is America's largest cable tv company and broadband company and is America's second largest pay tv company after arch rival AT&T.

    In 2011, Comcast bought NBCUniversal the company that owns the Universal film studio and resorts, NBC ( America's oldest broadcast network) as well as cable tv channels like SyFy and CNBC.

    I said in my OP, the "Big 6" Hollywood film studios will become the big three and be joined by newcomers like Apple, Amazon and Netflix. There might still be six companies in the end, but what six is being played out now.

  • Shares in 21st Century Fox have jumped amid reports that several major companies have come forward as suitors for parts of its business.

    The US firm's shares gained 4% in early trade on Friday, after several sources reported interest from Comcast, Sony and Verizon.

    That's what happens when you start reading the Guardian as you get sucked into their guff...:whistling:^^ Looks like Murdoch is selling and all the main players are interested.

    As for as implications for the UK, if Murdoch's share of Sky is sold especially to someone like Comcast, this will erk BT and Virgin Media and likely push them into the "warm" embrace of one of the other big U.S. media/telco companies. I expect ITV will be bought by someone like Disney and that will company will eventually be part of a larger company still.

    But the real big urn's, Apple, Google, Amazon and Netflix are conspicuously silent at the moment. I reckon they'll let the old Big 6 consolidate first, before they get involved.

    (Disclaimer: I have owned shares in media companies such as ITV, the old ntl company, Telewest, Altice, Entertainment One, Apple, Fox, Neflix and Disney. I presently do not hold any shares in any of these companies, but am considering it!)

  • Speculation is swirling that the Murdoch family is open to breaking up its entertainment business.

    Shares in 21st Century Fox gained more than 6% on Friday, after several sources reported interest from Comcast, Sony and Verizon.

    Last week the company, which is led by the family of Rupert Murdoch, was said to have held talks with Disney.

    This story is still rumbling on.

    What do we reckon, is Uncle Rupie really going to sell his empire which has taken him all his life to build up?

  • The US Department of Justice has filed a lawsuit to block telecoms giant AT&T's $85.4bn acquisition of Time Warner, the owner of CNN and HBO.

    The decision is a surprise since US anti-trust authorities rarely object to deals involving companies that do not directly compete.

    AT&T has said it will fight the decision.

    Murdoch may now try and buy Time Warner again, he has always coveted CNN.

    American media pundits believe the American authorities have no basis to block the AT&T and Time Warner merger. When this goes to court, they believe the merger will get cleared, so Murdoch may not have much time to act, unless he is genuinely selling up.

  • The Rupert Murdoch-controlled 21st Century Fox has restarted talks to sell most of the company, including UK broadcaster Sky, to Walt Disney, it was reported on Sunday.

    The negotiations centre on Fox’s film studio, cable channels such as FX, and international businesses including India’s Star network and Sky, the Financial Times reported, citing “multiple people with knowledge of the talks”.

    Looks like Murdoch is back at the House of Mouse and restarting talks with Disney.

    Netflix is not going to go away, Amazon will not either and there is Apple with its massive cash warchest waiting in the wings.

    There is about to be another round of massive media mergers, but whether Murdoch will be part of the future in all this remains to be seen. Does he really want to sell the empire that he built up over his entire life, or is this merger, if it were to happen, a backdoor way for him to consolidate further power?

    The House of Mouse might think it's taking over the Murdoch empire, perhaps Disney might be in for a shock it it were to get into bed with him though. Between a mouse and tiger, there is no competition. The tiger wins all the time.

  • The Fox boss James Murdoch is reportedly being considered as a potential successor to Bob Iger, chief executive of Walt Disney, if the two companies reach agreement on a possible takeover.

    According to the Financial Times, Rupert Murdoch and his younger son, James, could take senior roles at a combined company if a deal is struck. Iger, 66, is due to retire in 2019 and James Murdoch, 44, currently chief executive of 21st Century Fox and chairman of the satellite broadcaster Sky, is a possible successor.

    Why did I say about tigers and mice on Monday? Tigers always win. Now, it looks like we know what's going on.

    Murdoch is not throwing in the towel, quite the opposite, he's hoping to expand and take over Disney instead!

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