Control content, control data, control the world – the AT&T buyout of Time Warner

AT&T’s takeover of Time Warner makes strategic sense for the shareholders of AT&T. The only surprise is that early rumours of Apple buying over Time Warner did not come to pass.

AT&T are primarily a telecommunications company. They already control the data flows and analytics and understand all the little things that make people/customers tick. However, what they’ve not had is the content that their customers require and monetise the flow of content to the people who need it most.

Through the acquisition of Time Warner, it reduces AT&T’s transaction cost of providing the content to customers which is supported by superior data.

It’s akin to an infrastructure company laying pipes to bring water to households actually now providing the water along with the pipes they already have rather than have a separate company providing the water.

Why content matters

You have data on the information and content your customers require. However, you cannot act on the data yourself if you do not control the development of the content and intellectual property (IP). You can either try and create the content on your own or simply buy the largest available content provider available for sale.

This is what AT&T have done and it allows them to suddenly use the data and deliver even larger profitability to their shareholders by giving their customers the data they seek.

HBO (think Game of Thrones, Curb Your Enthusiasm, The Sopranos, etc), CNN, DC Comics (Superman, Batman, and the new UN ambassador, Wonder Woman), Hulu (Netflix’s rivals) are all now going to be under AT&T’s control.

This will allow them to control the entire spectrum of services they provide to customers and create an ecosystem (of both infrastructure and content) that may be difficult or unfeasible to leave for any customer.

Big data just gotten bigger

You know HOW your customers access information. You now know WHAT information your customers seek. Bring the two together and you create superior propositions for customers which rivals are unable to match.

The advertising potential also has now grown exponentially as AT&T monetise the data analytics and provide superior insight to advertisers.

Bringing the fight to the competition

The moment Google and Facebook moved from being search engines or networking platforms to becoming media and content companies with their own telecommunications infrastructure, the fight was on.

Facebook and Google are already providing Internet and call facilities. They also started buying or developing content facilities (Youtube acquisition by Google or Facebook Video/live).

This mean either existing telecommunications companies get into the business of content development or acquisition or they themselves get acquired. I suspect this was a major impetus for AT&T in their decision to buy Time Warner.

What next?

It’s always easy to bite, but it’s important to be able to chew and swallow. It remains to be seen how well the merger itself works. Most mergers are fraught with complications, from realising business benefits to cultural differences.

It will be interesting to examine Apple and Google’s next reactions. Google have developed their own hardware (Pixel) and Apple have long wanted to get into the business of content and IP.

Perhaps a takeover of Netflix by Apple in the offing?

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Can this be Apple’s future roadmap?

In a world where the lines between sovereign nationhood and corporations are increasingly being blurred (roughly half of the top 50 economies in the world belong to that of corporations!), I was keen to thinking about the future of the world where Apple is concerned.

Apple have remained the foremost innovators and designers, creating that ultimate blend of functionality, art, design and user experience that has allowed for a far greater take up of technology than previously envisaged. The ease of use of Apple products has democratised the usage of technology by people, of all backgrounds, ages and capabilities.

I started considering where Apple may be heading over the next decade and half and thinking about how Apple, both as a company and as a global corporate citizen of the world, may evolve.

The image below best describes my own thoughts on where I think Apple will head towards. I have also provided a brief narrative to provide greater context.

A possible roadmap of where Apple may be headed towards
A possible roadmap of where Apple may be headed towards

Some additional context

Apple started the creation of their wider ecosystem with the development of OS X in 2000. The iPod, iPhone and iPad (along with associated products such as the iPod Touch, etc) relied on the iOS, which formed part of the greater ecosystem for Apple users.

Apple’s launch of the Apple Watch was the start of Apple’s foray into wearable technology (following at least two years of speculation).

Apple have also introduced Apple Pay, Apple HealthKit, and Apple Music (which nicely ties in with their multi billion acquisition of Beats) over the past few months.

2016 – the year of maturing of new initiatives

My view is that in 2016, Apple will support the development of additional personal and wearable technology (including iRing, Apple Glasses, etc) and we will see further launch of similar products (alongside newly launched products such as the new Apple TV). We will also see a further maturing of the Apple Pay system and greater application development for Apple HealthKit, utilising the Apple Watch and other related wearable technology.

2020 – The Apple Car zooms in

In about five years, we can expect to see the launch of the Apple Car. Possibly a completely electric car, with both driving and driverless functions, it will seek to revolutionise traffic control and movement. We can also expect to see financial aspects of the car, including insurance, leasing or hire purchase, supported by Apple Pay (or through connected bank accounts).

There could also be a potentially different model where Apple directly manage and maintain a fleet of driverless Apple cars, and passengers who seek transport can get in and by pre-booking through their Apple phones and/or other Apple products, can pay directly to Apple using Apple Pay (and taking on uber in the process).

Apple Insurance

We can also expect to see Apple providing direct insurance services to their consumers and users. Apple HealthKit can detect the health readings of an individual user and in the process price an appropriate insurance premium.

An individuals driving patterns can also provide data to help Apple price an appropriate auto/car insurance premium.

There could be a further maturing and take up of Apple Pay and related financing and banking products

2022 – Apple iBank is established

In the wake of the additional banking and insurance facilities provided directly by Apple, we can expect the iBank to be established which will allow for Apple to develop additional banking and finance capabilities, whilst also making better use of their cash hoard.

The iBank becomes the investment arm for Apple as Apple expands its product range into mortgages and fund management.

As Apple increasingly expands its portfolio of products, they start contemplating the development of Apple homes and flat

2025 – Apple the property developers and managers of societies

Apple starts producing smart iNtelligent homes to support increasing government demands for affordable, smart housing to meet the growing population demand.

The Apple Home becomes an all-encompassing home that is fitted with Apple sensors, that demands Apple usage by the users/residents and incorporates all other elements including mortgage, insurance, and electronics/appliances which syncs itself automatically with the user needs and demands.

Having a smoke at home – expect the Apple sensors to pick this up and send you an add-on to top up your health insurance with, for which you can make payment through Apple Pay – connected to your Apple iBank account.

Your fridge stacked with fizzy drinks, sugar-laden donuts and you are consistently frying food? Expect to receive a notification that your health insurance premium may be compromised and that you may need to top up!

2026 – Apple starts funding governments

As Apple Bank expands further, we can expect to see Apple Bank participating directly in funding campaigns led by the IMF, the AIIB (Asian Infrastructure Investment Bank) and the World Bank, amongst other multilateral agencies. This participation may allow for Apple to obtain additional concessions to sell their products or services.

We can also expect to see Apple participating in various UN and international conferences to support their aims and ambitions

2030 – All hail the Apple Nation

In 2030, the first Apple Citizen is naturalised. The Apple Citizen received an Apple passport, which allows him to travel to a large number of countries (all of the visa requirements are pre-met through Apple’s existing data). Apple’s virtual citizenship is supported by a comprehensive and robust Apple foreign policy backed by a deep monetary policy (exercised by Apple’s iBank) which also means the launch of the iDollar (Apple’s virtual currency backed by the Apple Central Bank).

Apple’s predictive AI (artificial intelligence) also can predict individuals who may be about to engage in subversive activities and detains them for their own benefit and reduce crime and a state of lawlessness. It also forces health lifestyle habits.

Apple starts running lives and tells people how to dream and what to dream.

The era of Apple

This could be the era of Apple. Some may welcome it as it could lead to a more efficient world. Others will resist. The resistance will be led by the men and women wearing old school Casios and using Nokias!