Those cheering on media mergers believe in a new conglomerate for the new economy. Against this faith stands the record of integrated media companies, which, as David Olive pointed out in a shrewd Sept. 16 National Post story, is lousy. Media mergers do not make money now and did not in the past, and have demonstrated no reason why this should change. Olive further pointed out that the new media companies are custom-built to aggravate regulators. The merger of AOL and Time Warner is being tied up by regulators who want the combined company's networks opened to competitors.
Management claims it is willing, but no one is fooled.
There is little point in the merger unless it forms a walled city, with AOL's millions of customers cut off from media content suppliers who don't grease the management. Yep, history is on the march, and it's all as inevitable as, well, Marxism. Setting aside the babble about platforms and eyeballs and historical forces, telcos and cable companies have run into slower revenue growth while the cost of keeping up with technology continues to climb. The audience will go along with this without seeking alternative sources. If you think this sounds naive now, imagine how it will seem a decade from now.