Kenversations: Disney’s Changing Playing Field (Part 2 of 3)
Page 2 of 3
How many times are you willing to buy the same feature film? Apparently, even more often than you are willing to upgrade television screens.
But hold on. Time Warner engineers recently came up with a disc that can carry the DVD, HD DVD, and Blu-ray formats, and other remedies to the dilemma are also heading to the market, including players that play both formats. The pirates are also figuring out the new formats, too.
But let's get back to one of the ways people are getting their content at home and their Internet access – cable.
The cable television provider industry landscape has changed. Adelphia, for example, was acquired in 2006 by Time Warner and Comcast , who divided up Adelphia's coverage areas and traded some of their own to each other to solidify regions.
Comcast, which once had a cellular business that it sold to SBC, merged with MediaOne in 2002. That was after many other acquisitions. Also in 2002, Comcast acquired the spinoff AT&T Broadband. In early 2004, it made noise by making a bid for Disney.
Time Warner Cable itself was the result of a 1989 Time-Warner merger, and then was added to when Time Warner acquired Ted Turner's media empire in 1996, and then when Time Warner was acquired by AOL in 2001.
As for Charter Communications, I find it interesting that Paul Allen, who as I said earlier was a major original investor in DreamWorks, bought a controlling interest in Charter in 1998. While "Hollywood" studio moguls have (or have tried to) become captains of the online world, "Silicon Valley" titans like Allen and Jobs have turned out to be major players in the media entertainment industry.
The cable industry, while fending off the likes of satellite TV companies DirecTV and Dish Network, has a new rival – the newly reformed telecom behemoths, which are ramping up access to programming content through their high-speed Internet connections.
SBC bought AT&T, then adopted the AT&T name and recently got approval to swallow up BellSouth – and thus, the part of Cingular it did not yet own - nearly reforming the old “Ma Bell�? that was broken up in the early 1980s – only now it was more than just land line telephones. The biggest competition for AT&T comes from Verizon, which swallowed up MCI. There’s also Qwest. Regal Entertainment Group owner Phil Anschutz just sold 90% of his ownership of Qwest. Anschutz’s AEG is a major player in sports and the redevelopment of downtown Los Angeles… I’ve noticed that the names of Anschutz, Paul Allen, and Steve Jobs pop up a lot in the topics about which I’m writing. But I digress.
Clearly, with mobile phones now being pocket computers and mini-entertainment centers - just consider Apple’s iPhone - and with the web become more and more a primary medium for people to receive their entertainment and news, what happens with the telecoms and online portals does have a huge impact on Disney. AT&T and Verizon’s mobile businesses aren’t the only game in town, but it does seem like there are fewer choices, maybe because Sprint bought Nextel in 2005, and all of the different cellular phone service provider brand names that have come and gone over the years. There is also T-Mobile, and some others, and for phone call needs, there are also the “voice over Internet protocol�? providers – but you need the Internet access, software, hardware, and power to use it. However, giants like AT&T, Time Warner, and Qwest are trying to lure and keep customers by bundling mobile and land-line phone service with other services, such as cable or satellite television, and DSL or cable Internet access.
Technology has also changed television advertising. Because viewers started using devices such as TiVo to skip commercials, product placements in programming have become more important. Advertisers also have more options of where to advertise, thanks to technology. The World Wide Web not only offers a venue for advertisements, but the advantage of targeting a demographic with even more precision than with television. Television ads may last 30 seconds, but you may be on a web page for several minutes while an ad is running in the corner, an ad related to the topic for which you just searched.
Advertisers now have one less national broadcast network. In another paradox, Disney will potentially benefit and lose with these shifts in broadcast television networks. Time Warner had been operating the money-losing WB Network and Viacom, and then CBS had been operating the money-losing UPN Network in addition to the entrenched legacy CBS Network, and the corporations joined forces to create the new CW by shutting down the WB and UPN. Disney’s ABC Network wins because that means there will be one less national network to compete with, one less place for advertisers to get blanket national exposure. However, it also means there is one less network around to pay to air Disney-produced/distributed television shows, and one less broadcast network vying for the rights to run Disney’s feature films. This has also had ramifications for Fox, because in addition to the Fox Network, some Fox-owned stations (like KCOP Channel 13 in the Los Angeles market) had been carrying UPN programming and are not CW stations. Fox responded by launching a new mini-network - MyNetworkTV - for those television stations. In markets like Los Angeles, CW plays on stations that carried the WB.