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Opinion | AT&T’s Sorry Retreat From Digital Media

It’s an if-only dream that many share, but it might never come to fruition, given the financial elements that point to only one outcome: an eventual win by Big Tech.

Consider that AT&T shares were around $38 when the company announced the deal to buy Time Warner in May of 2017. As of Thursday, the stock was around $29, and the company’s market cap was $211.3 billion. Verizon’s stock has done a little better in that time period, going from $45 to $57 a share, and a $235.4 billion valuation.

In the same period, Netflix’s share price went from $160 to $502 ($222.7 billion valuation), Amazon’s from $996 to $3,248 ($1.64 trillion), Apple’s from $38 to $127 ($2.2 trillion) and Google’s from $955 to $2,303 ($1.56 trillion).

You can see where this is going,

Big Tech companies cannot make huge acquisitions of creative-content companies nowadays because of a political climate that is increasingly skeptical of their monopolistic power. But they only have to sit and wait to bleed out what are now much smaller and less powerful media companies by simply plowing more investment into content and talent.

“Like all monopolies going back to oil or trains,” the tech companies will “just slowly starve” the competition, a top media executive said to me, also noting that Mr. Stankey did not have the support or fortitude to keep going. “I guess it’s good that he stopped banging his head against the wall,” the executive said.

Or maybe not, given his problematic choice of Discovery as a partner. It’s simply too small, even with a multibillion-dollar war chest to make content. That’s why I would not be surprised to see another, larger bidder for Time Warner emerge soon — perhaps Comcast, which already owns NBCUniversal. While some people denounce the consolidation of media companies, there are few choices for media firms when they are facing down the tech companies.

Tech giants have more of everything. They are much more flexible with creators. They have more platforms to offer. They control all the key user data and are getting better at all kinds of media making. More important, they do not have the need to make a profit in media, since they all have other ways to make money, and they have an investor base highly tolerant of investing in growth.

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