Beijing time on the afternoon of December 18, according tomedia reports, in 1996 Bill Gates said: “content is king”, in the media and communications industry, Gates said this. But over the past decade, content publishers – AT?amp;T, Verizon, Comcast and Netflix – have proved to be the de facto “kings” of investing billions of dollars in original programming, while smaller media companies have scrambled to find their own buyers.
At the same time, advertising costs have poured money from content owners to online giants, whose content is almost entirely dependent on others.
Ten years of transformation
Looking back at 2010, we can see:
Time Warner and News Corp. were second only to Disney in 2010, and the growth in cable network revenue contributed to most of the sales, but the advertising market remained weak in 2009 as the financial crisis continued.
DirecTV was then the world’s largest pay-TV provider, with more than 28 million subscribers in North and South America by the end of 2010.
Yahoo was also an internet giant with a market capitalisation of $24 billion in January 2010, and just two years ago rejected Microsoft’s $44 billion offer.
Until January 2011, NBC Universal’s old owner was General Electric, which held a 49 percent stake in NBC Universal until 2013. GE’s market capitalisation was $161bn in January 2010 and is now $96bn.
With a market capitalisation of $2.9 billion, Netflix has just transitioned from DVD to streaming.
The company has yet to acquire DirecTV or Time Warner, which has higher revenue squeabes (and DSLs) than its wireless business.
Charter Communications remains a little-known regional cable company, worth just $4 billion.
Viacom and CBS, two of the largest content companies of 2010, merged earlier this month. The merger of the two companies marks an important trend of the decade , the era of pure content companies.
While Disney remains a pure content company until this year, with a market capitalisation of $266bn, the two largest pure content companies since Disney, Discovery and Viacom CBS, have a market capitalisation of less than $40bn. (Although Sony has a market capitalisation of $82 billion, its entertainment business is only a small part of sony.) )
Lionsgate, MGM and other smaller content providers are likely to seek a sale in the next decade.
Facebook, Twitter, Spotify and Snap have become the new stars of modern media, in the ruins of the once-media and internet giants. Both companies went public after January 1, 2010, each with a market capitalisation of more than $20 billion.
Facebook and Google have been the most influential internet companies for the past decade, with market capitalisation alone: Facebook has a market capitalisation of $564bn today; Alphabet, Google’s parent company, has a market capitalisation of $938bn. It is the third-largest U.S. publicly traded company after Apple and Microsoft. With its number one search engine and YouTube, which was acquired in 2006, Google’s advertising reach has doubled.
Pivotal Research estimated last year that Google and Facebook contributed 90 percent of digital advertising growth. Over the past decade, the size of the two companies and their conservative business models have left a host of emerging digital media companies with nowhere to live. Tumblr, BuzzFeed, Zynga and other early 2010s digital darlings have all failed to thrive.
Facebook’s growth has been helped by two key acquisitions of the company, Instagram for $1 billion in 2012 and A wit two years later, for WhatsApp for $19 billion. Bloomberg estimated last year that If Instagram remained an independent company, it could be worth $100 billion.
The chart below illustrates how the market capitalisation of media and telecommunications companies changed a decade ago and ten years later
Among the companies on the list, Netflix topped the list, with a market capitalisation soaring from $2.9 billion in 2010 to $132 billion by the end of 2019. Although Netflix was already transitioning to streaming video in 2010, the company was not on the road to buying original programming. In 2013, Netflix first bought the original show House of Cards, followed by original shows such as “The Heprue Tree” and “Women’s Prison.” “Women’s Prison” has been on for seven seasons, and this year it’s just getting its final season.
Charter and T-Mobile have grown almost the same in value, although the two have taken very different approaches. Both companies have gained market capitalisation by as much as 2300 per cent. Once the fourth-largest cable company in the U.S. (after Comcast, Time Warner Cable and Cablevision), Charter is now the second-largest cable operator after buying Time Warner Cable for $79 billion in 2015.
In 2011, AT?amp;T paid T-Mobile a $6 billion break-up fee for a failed takeover. With that money, T-Mobile is pushing ahead of Sprint as the nation’s third-largest wireless carrier. Now, T-Mobile is taking a bigger step: the company is trying to persuade a federal judge to approve its merger with Sprint.
Amazon, another company on the list that has grown more than 1000 percent. Amazon has taken advantage of its retail presence to launch Amazon Prime Video, enter the media world, and a variety of other new businesses.
Some companies are growing within the company, while others rely on mergers to grow themselves.
Comcast bought NBC Universal from General Electric, and Dreamworks Animation and Sky have embarked on a transition from cable operatorto to international content. Today, the company is worth more than four times as much as it was a decade ago.
Over the years, Disney, led by Bob Iger, its chief executive, has grown from an entertainment and theme park company into a media giant by buying and buying most of the assets of Marvel, Lucasfilm and 21st Century Fox.
Although the list edits have grown more or less after January 2010, the market value of Sprint, AT?amp;T, Discovery link and Dish has grown by less than 100 per cent as the 2008 financial crisis has led to a severe downturn in the market.
Sprint’s market capitalisation is largely supported by a potential merger agreement with T-Mobile. Without the deal, the company’s market value would be even lower.
In fact, given the company’s $67 billion acquisition of DirecTV in 2015 and $85 billion in Time Warner in 2018, it’s surprising that AT?amp;T can maintain a 71 percent growth. The total value of the two acquisitions exceeds $150 billion, more than the company’s $117 billion in market value over the past decade. It also explains why Elliott Management, the hedge fund, was willing to buy a stake in AT?amp;T earlier this year and wants to help the company do better over the next decade, as well as proposing a management change.
Discovery grew 84 percent, including a $14.6 billion acquisition in 2018 for Scripps Networks Interactive. Discovery’s market capitalisation is now just $16bn, suggesting it may have paid too much to buy Scripps. The latter’s linear wired networks no longer seem attractive in the age of streaming video.
Over the past decade, Dish has struggled to transition to wireless, but it’s not going to work. At the same time, the company’s satellite TV business has lost a large number of customers. Amid all the difficulties, Dish is still waiting for A. Judge Victor Marrero to decide whether the company can access wireless broadcasts and share a web hosting agreement with T-Mobile.
Although the company bought Level 3 Communications for $34 billion in 2017, Centurylink’s market value barely rose a bit. Over the past decade, the telecoms provider’s business has struggled as cable and wireless companies have entered the fray.