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AT&T plans to spin off entertainment assets in a blockbuster deal with Discovery. What went wrong?


yanceycravat
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https://www.msn.com/en-us/money/companies/atandt-plans-to-spin-off-entertainment-assets-in-a-blockbuster-deal-with-discovery-what-went-wrong/ar-BB1gNUJW?li=BBnbfcL

The proposed transaction, which would require the approval of federal regulators, would mark a stunning retreat for AT&T, which spent $85 billion three years ago to buy Time Warner Inc., owner of CNN, HBO, TBS, TNT and the storied Warner Bros. film and TV studio. AT&T now appears ready to jettison those assets — although AT&T investors are expected to remain stakeholders.

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Looking at it from the other end, Discovery has been trying to launch its own service for years, and NOBODY CARES.  That's including Discovery Channel, Discovery Kids, H&G and Food Network, most of which has been reduced to Amazon paywall.

I know we want to push the narrative of "AT&T's failure, wah-wahh!" now that our streaming-era disenchantment with Disney+ and HBOMax has set in (although notice that poor, poor Discovery has "a lack of original scripted shows"), but a merger is as much a case of the little guy buying, as much as the big guy selling. 

Yes, AT&T never did have the foggiest idea of what they were doing, and only got in to bed with Warner/HBOMax because cellular networks depend on being drug-dealers to get fans hooked on streaming services (because they still think we watch them on our cellphone data-plans rather than our living-room Rokus), but reports of AT&T's "crushing failure" are sadly premature.

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14 hours ago, yanceycravat said:

https://www.msn.com/en-us/money/companies/atandt-plans-to-spin-off-entertainment-assets-in-a-blockbuster-deal-with-discovery-what-went-wrong/ar-BB1gNUJW?li=BBnbfcL

The proposed transaction, which would require the approval of federal regulators, would mark a stunning retreat for AT&T, which spent $85 billion three years ago to buy Time Warner Inc., owner of CNN, HBO, TBS, TNT and the storied Warner Bros. film and TV studio. AT&T now appears ready to jettison those assets — although AT&T investors are expected to remain stakeholders.

I started to always be able to tell when this kind of sale of a studio was in the works. On the lot, they would start laying off people who maintained the lot-gardeners, painters, electicians, etc.  The supply store would be closed or refashioned, etc., etc. Once you saw these things happening around you, sure enough, the studio sold to someone else. Fortunately for those of us working on shows, productions were considered a temporary expense and were kind of left alone.

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1 hour ago, Stallion said:

I started to always be able to tell when this kind of sale of a studio was in the works. On the lot, they would start laying off people who maintained the lot-gardeners, painters, electicians, etc.  The supply store would be closed or refashioned, etc., etc. Once you saw these things happening around you, sure enough, the studio sold to someone else. Fortunately for those of us working on shows, productions were considered a temporary expense and were kind of left alone.

The very people who need jobs the most the working class are always the first to go.

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4 hours ago, Millenniumman said:

The linear channels are a perfect fit with Discovery non scripted content is what they want

HBOMax basically wants Discovery's shows as their answer to Disney+'s National Geographic shows.  

(After National Geographic Channel also had its own bad luck trying to go solo-streaming/cable.)

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22 minutes ago, jamesjazzguitar said:

PPS may be TCM's only home.    

Did you mean PBS or is PPS something?

If PBS, how would that work?  PBS mostly shows British, Canadian and similar shows.  I can't see them handling the volume of TCM shows

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6 minutes ago, ElCid said:

Did you mean PBS or is PPS something?

If PBS, how would that work?  PBS mostly shows British, Canadian and similar shows.  I can't see them handling the volume of TCM shows

Yes,  I meant PBS (since corrected):      PBS has more than just one station (at least here in So Cal).     E.g.  the new Create chancel that features interesting programing about cooking,  art, and other creative endeavors.

PBS could establish a TCM like station:  showing mostly public domain films,   films donated by the studios,  and films leased from studios using contributions.   Note this "films donated by the studios" could be key:    films that a studio doesn't believe they can make much future money on,   and will donate these films for a very limited showings in exchange for acknowledgement that they are a good public citizen.      

Hey,  this might be a crazy idea,  but my overall point was that I can't see TCM being just-another-station on Discover,  or by another media company unless TCM is profitable.   I.e. a media company that wouldn't care if TCM was profitable or not,  because they just wish to have this unique station as part of their brand.

 

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19 minutes ago, jamesjazzguitar said:

PBS could establish a TCM like station:  showing mostly public domain films,   films donated by the studios,  and films leased from studios using contributions.   Note this "films donated by the studios" could be key:    films that a studio doesn't believe they can make much future money on,   and will donate these films for a very limited showings in exchange for acknowledgement that they are a good public citizen.      

They USED to show public-domain films, in the 70's, which is how "It's a Wonderful Life" was singlehandedly wrenched out of folded-studio obscurity to...well, you know the rest.

There were a lot more available films, in the pre-VHS era, when it was all about local TV stations, and MGM didn't mind if some local PBS affiliate showed "Singin' in the Rain", but we don't have that now.  To put it mildly.

(And ironically, I'm getting flashbacks of all those old Reagan/Bush-era Congress debates of why it wouldn't be a "bad" thing to defund PBS, so that they wouldn't make that nasty old "Frontline" anymore:
"We don't need a taxpayer-funded channel!--Corporate cable could take up the slack!  The History Channel could show Ken Burns' Civil War!  Nickelodeon could show Sesame Street!"  I would historically laugh ha-ha, knowing what we know about cable now that they didn't 😂 ,  but then that darn struggling HBO Sesame Street keeps ruining the joke.)

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I don't follow all the various corporate moves of AT&T. They get too complicated. As long as they keep

paying dividends I'm okay.

 

When I lived in Vermont the local PBS station played old movies at 11 p.m. most nights. Of course they

were uncut and commercial free. 

 

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The problem for AT&T was that when they bought Warner they didn't foresee how capital intensive that asset would become over the next few years.  Netflix and Amazon were much smaller in the content investment space back in 2016 when the merger was announced.

https://www.statista.com/chart/14731/netflix-cash-spending-on-streaming-content/

https://www.statista.com/statistics/738421/amazon-video-content-budget/

 

The riskiness of the distribution business is just so different today than what it was even just 5 years ago, it now feels like a high-risk, high-reward business model given how much up-front cash is needed to compete with the streamers.  I can see how a long-term, established company like AT&T doesn't want to be the ones to be along for that ride, a colossal failure in media could ruin the whole company.  They already have a capital-intensive dogfight in the 5G space.

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7 hours ago, jamesjazzguitar said:

Yes,  I meant PBS (since corrected):      PBS has more than just one station (at least here in So Cal).     E.g.  the new Create chancel that features interesting programing about cooking,  art, and other creative endeavors.

PBS could establish a TCM like station:  showing mostly public domain films,   films donated by the studios,  and films leased from studios using contributions.   Note this "films donated by the studios" could be key:    films that a studio doesn't believe they can make much future money on,   and will donate these films for a very limited showings in exchange for acknowledgement that they are a good public citizen.      

Hey,  this might be a crazy idea,  but my overall point was that I can't see TCM being just-another-station on Discover,  or by another media company unless TCM is profitable.   I.e. a media company that wouldn't care if TCM was profitable or not,  because they just wish to have this unique station as part of their brand.

 

It is up to each state as to how many PBS stations they have.  In my area of SC, there are four on Spectrum cable, but one is actually on there because we live so close to NC.

There are about a dozen OTA PBS stations, but half of them are same programs but on a different channel from a different location.

Regardless I can't PBS/State public TV offering a lot of TCM type movies.   Good thought though.

If Discover gets TCM, you can expect it to go the way of AMC within a few years.  Advertising and far fewer movies.  Best to hope for is something like FXM, but with a far greater variety of classic movies.

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54 minutes ago, ElCid said:

It is up to each state as to how many PBS stations they have.  In my area of SC, there are four on Spectrum cable, but one is actually on there because we live so close to NC.

There are about a dozen OTA PBS stations, but half of them are same programs but on a different channel from a different location.

Regardless I can't PBS/State public TV offering a lot of TCM type movies.   Good thought though.

If Discover gets TCM, you can expect it to go the way of AMC within a few years.  Advertising and far fewer movies.  Best to hope for is something like FXM, but with a far greater variety of classic movies.

You happen to live in a state where the state government has set up a statewide network of public television stations.  It doesn't work that way everywhere.  Oklahoma is similar to SC.  Texas has no such setup.  Each market in TX has its own public television operator.  In some cases, it may be a school or university.  In other places, it's just a non-profit corporation that runs the station.

What jamesjazzguitar meant was that a public broadcasting station (which may or may not be affiliated with PBS - most are, but some are not) could choose to use one of their multicast programs (digital subchannel) and dedicate it to film.  Today, most (but not all) public TV stations carry PBS, Create, World, and PBS Kids.

The "Create" and "World" channels that most public TV stations carry on their .2, .3, or .4 channels are actually provided by American Public TV, not PBS.  Most public TV stations actually belong to both PBS and APT, though they "brand" their station as a PBS station.

APT actually does provide a package of classic movies to stations.   Here's an example:

https://www.aptonline.org/catalog/PUBLIC-TELEVISION-FEATURE-FILM-PACKAGE-SEASON-2

The Oklahoma public TV network OETA carries this package on their main "PBS" channel on weekend evenings.  The Dallas public TV station, KERA, does not. 

Obviously, this package isn't enough to run a dedicated channel 24/7, but there has been a precedent of public television showing films commercial free.  

https://en.wikipedia.org/wiki/American_Public_Television

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On 5/16/2021 at 5:35 PM, yanceycravat said:

https://www.msn.com/en-us/money/companies/atandt-plans-to-spin-off-entertainment-assets-in-a-blockbuster-deal-with-discovery-what-went-wrong/ar-BB1gNUJW?li=BBnbfcL

The proposed transaction, which would require the approval of federal regulators, would mark a stunning retreat for AT&T, which spent $85 billion three years ago to buy Time Warner Inc., owner of CNN, HBO, TBS, TNT and the storied Warner Bros. film and TV studio. AT&T now appears ready to jettison those assets — although AT&T investors are expected to remain stakeholders.

They're still living off the old paradigm of getting $150/month out of every household. Whether its cable/satellite/internet/cellular / or even landline 🙄, they don't care which service you choose. And people are ditching that plan in droves. I don't know anyone under 60 who has a direct at this point.

On 5/16/2021 at 6:08 PM, EricJ said:

Yes, AT&T never did have the foggiest idea of what they were doing, and only got in to bed with Warner/HBOMax because cellular networks depend on being drug-dealers to get fans hooked on streaming services (because they still think we watch them on our cellphone data-plans rather than our living-room Rokus), but reports of AT&T's "crushing failure" are sadly premature.

Most people I know under 30 do watch their entertainment this way.

I knew this streaming free for all would eventually settle down at some point. All those $5 and $10 and $15 bills each month add up eventually. And nobody watches all of them.

 

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On 5/17/2021 at 12:42 PM, Millenniumman said:

The very people who need jobs the most the working class are always the first to go.

Yes, that's one of the reasons these giant mergers are never good for the public. 

I can't believe the DISCOVERY Channel is even "a thing", it's offerings are terrible old, tired shows.

If PBS or anyone else takes over TCM, you can say bye-bye to any unique movies. The experienced knowledgeable programmer will be replaced with someone's corporate pal who likes old classic movies like Star Wars.

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Wall Street Journal is saying that AT&T may sell Warner Brothers to Disney. That would make them too big. And it would also insure that you never see The Jazz Singer or Gone With the Wind again in this century. Disney - The CVS of entertainment. 

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11 minutes ago, LsDoorMat said:

Wall Street Journal is saying that AT&T may sell Warner Brothers to Disney. That would make them too big. And it would also insure that you never see The Jazz Singer or Gone With the Wind again in this century. Disney - The CVS of entertainment. 

I'm not as cynical about the WB package of films and entertainment being sold to a company like Disney;  it all depends on the selling price.

If that price is  "reasonable" then Disney is large enough and makes enough money off of other forms of entertainment that they can subsidize a network like TCM;   Disney can afford to purchase that liberty of "those old film" with the main goal being just-to-say-we-have-them,  leverage that as a marketing tool for their other products,  and not, per se,  to make a profit from that division. 

As for CVS:   It is my understanding they provided vaccinations at a loss;    This is what large profitable corporations can do,  as a public service in order to increase their market place presence and therefore revenues from their core products and services. 

   

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2 minutes ago, jamesjazzguitar said:

I'm not as cynical about the WB package of films and entertainment being sold to a company like Disney;  it all depends on the selling price.

If that price is  "reasonable" then Disney is large enough and makes enough money off of other forms of entertainment that they can subsidize a network like TCM;   Disney can afford to purchase that liberty of "those old film" with the main goal being just-to-say-we-have-them,  leverage that as a marketing tool for their other products,  and not, per se,  to make a profit from that division. 

As for CVS:   It is my understanding they provided vaccinations at a loss;    This is what large profitable corporations can do,  as a public service in order to increase their market place presence and therefore revenues from their core products and services. 

   

Well one thing I can say for CVS versus Disney - I don't think that CVS is in bed with the Chinese Communist Party.  Disney gave shout-outs to the people who run the Uyghur concentration camps in China in the credits of Mulan. You did know that didn't you? I won't pay a thin dime for anything Disney controls because they snuggle up to these fascists. If Disney ends up owning TCM, it will be goodbye to TCM from me. 

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5 minutes ago, LsDoorMat said:

Well one thing I can say for CVS versus Disney - I don't think that CVS is in bed with the Chinese Communist Party.  Disney gave shout-outs to the people who run the Uyghur concentration camps in China in the credits of Mulan. You did know that didn't you? I won't pay a thin dime for anything Disney controls because they snuggle up to these fascists. If Disney ends up owning TCM, it will be goodbye to TCM from me. 

Ok,  so that is your actual reason for not supporting a sale of the Turner library of films to Disney.      

 

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