"On TV And Video" is a column exploring opportunities and challenges in programmatic TV and video.
Today’s column is written by Tom Kenney, president and CEO at Verve.
The recent news that AT&T intends to buy Time Warner represents a key example of what will almost certainly be an industrywide tide of media merger-and-acquisition moves in the near future. These will come not only from AT&T, but also a range of players across the TV content and distribution spectrum.
And each merger that eventually goes through will drive powerful changes in the way TV and mobile interact. The rise of these kinds of proposals represents a moment of vital importance: Mobile marketing is poised to play a critical role in the future of content and distribution.
Both AT&T and Time Warner are looking for something more profound from this merger than a simple and straightforward content play – and it’s not just a zero-rating data play, either. The approaching 5G transition is a factor in AT&T’s intent to buy Time Warner, and it also figures into the future of content, distribution, and all the ways in which mobile consumers engage across numerous screens, in numerous contexts, over time.
The 5G Factor: AT&T and Time Warner Prepare For The Next Generation Of Mobile
When it comes to how consumers get their content in the near future, it’s more than reasonable to suggest that 5G, the next generation – or “G” – of the wireless network system consumers use, will largely or even entirely replace traditional TV infrastructure, such as wired cable and other paid distribution channels.
The industry is on 4G, or LTE, today. By encoding data so that it moves faster and in larger quantities, with lower latency and more flexibly than ever, 5G stands to replace fiber, cable, satellite and DSL to the home. Commercial rollout is expected starting in 2019, and some stakeholders suggest they’ll be fully 5G by 2020. It’s impossible to overstate its approaching impact.
AT&T is now the country’s largest pay-television company, with 26 million subscribers via its acquisition of DirecTV. Its leadership surely sees the long-game advantage in owning the next generation of “pipes” that will assume the job that’s done by traditional cable today. Owning the pipes means having an early and established position at the forefront of distribution, and it gets AT&T out in front of what will likely be a range of coming questions about 5G regulations and standards.
The key systems currently delivering content to audiences are set to shift, to a significant extent, moving from hardwired households to 5G-powered mobile wireless devices and services. Time Warner’s leadership is certain to see an advantage in aligning with early and aggressive players, too.
In a future where content stands to stream primarily through mobile devices, a successful AT&T–Time Warner merger will be a clear win for both organizations, affording both companies early leverage in commanding the 5G distribution and content space.
The Future Of 5G And Media Mergers: New Engagements Across Screens
Content is becoming mobile. TV is becoming mobile and its content no longer cares about the device. Kids now watch more of it on their phones and tablets than they do on a flat screen in the living room.
Mobile content works at its best – and it succeeds most often – when it finds meaningful ways to engage with consumers across all screens, locations and contexts. And it serves brands and consumers best when mobile marketing helps the industry capture the attention of consumers, and then evolves with them as they interact with apps, move from place to place and communicate intent and sentiment in reaction to what happens on their screens.
The call to mobile technology and marketing leadership is to get ahead of the curve, similar to the way AT&T is positioning itself with 5G. Providing personalized, individualized and predictive mobile creative will drive engaged consumers who are willing to grant location data in exchange for relevant on-screen experiences. Jeffrey L. Bewkes, Time Warner’s chief executive and chairman, is already describing this personalized, data-driven approach as a key way forward for TV advertising.
TV as an industry will have to bow to the coming 5G reality, which is not to say it will go away, but it will transform into a version of itself that acknowledges the value of mobile players coming in – and they're going to be big players. As for the developments already before us, this is just the beginning. By the time huge mergers like AT&T and Time Warner are done and in place, regardless of whether consumers are getting content via flat screens, mobile screens or both, it is clear that the future of content and distribution is absolutely headed mobile’s way.