Another year, another massive merger. Recall back in April 2015, when cable/internet behemoth Comcast—also owners of the major content studio NBC-Universal—walked away from its planned acquisition of Time Warner Cable, after folks like Future of Music Coalition pointed out how devastating this deal would be to content creators and Internet users. Well, now another slightly-less-massive cable co., Charter Communications, is attempting to gobble up TWC. If allowed to go through, this deal would create a true Mega Cable conglomerate with the same incentive as Comcast to call the shots on content and innovation while depriving creators and fans of choice in the legitimate digital marketplace.
As our friends at Writers Guild of America, West are expert at pointing out, this deal would have perilous consequences for the emerging “over-the-top” video market, where consumers are able to choose which programming suits their interests and budgets using apps and services delivered over the Internet. This is an attractive opportunity for many households that are already paying hundreds of dollars for broadband and cable television bundles. A combined Charter-TWC would have every incentive to preserve its lock on the delivery of TV programming, and could do so via their cozy relationships with some pretty big cable networks. But it’s not just video content that would be affected if Mega Cable comes to pass. Musicians and composers are content producers, too—a considerable number of of us provide television and movie producers with songs and scores. The downward pressure that comes from just a couple of companies controlling this space can be felt in several ways. It could mean smaller music licensing budgets and less opportunity to get our music in front of audiences due to tight control of cable set top boxes and Internet-powered applications.
Let’s make that more real. Imagine that there’s a new, artist-owned, truly cooperative on-demand streaming service that’s getting off the ground. As a musician or listener, you want to support this platform because you think it has a real shot at satisfying artist and fan needs. But what if it’s not included on the box where all your home media options live? Or what if using that app or service meant incurring huge data overages, whereas Mega Cable’s proprietary service (or that of their business crony) does not?
The above is a scenario that is playing out right now. It reduces choice in the marketplace and lessens the viability of artist-friendly services. In 2016, we know how hard it can be to eke out a living as a creator. We’re not asking for a handout. We’re asking for a chance to compete.
Another concern is whether a combined Charter-TWC will live up to their obligations under law with regard to artist and rightsholder intellectual property. As far as we know, Charter is not a member of the Copyright Alert System—a voluntary community of Internet Service Providers that has implemented an educational system to remind users of alternatives to piracy. Like the National Music Publishers Association, who raised these issues in a letter to the Federal Communications Commission, we’d like to have a better understanding of whether Mega Cable intends to be a good actor on creator rights, and to have this be one of the merger conditions should the deal go forward.
But there’s yet another wrinkle. If individuals and families are already paying a ton of money per month for Internet access (wireline, mobile or both), chances are they don’t have a lot left over for discretionary spending. You know, like on subscription services or live concerts or even album purchases. The thing you don’t hear about with these mergers is how much they cost the corporation doing the buying. In this case, it’s Charter—not the worst in customer service, and a company with a modest plan to build out to more areas. To finance the deal, Charter has to take on tremendous debt to close the $67 billion-dollar acquisition. How do you think that will affect their plans to build out to underserved communities? Will they stop investing in customer service? Will they raise prices? All of the above seems likely.
At this moment in history, fans enjoy unprecedented access to music and other content through a plethora of licensed platforms and technologies. Creators need to have some flexibility in choosing which avenue makes sense for their small businesses. Massive mergers like the Charter-TWC deal make it harder for content creators to enjoy fair pricing and crucial paths to potential audiences. Rather than carve up the broadband and entertainment delivery market between two massive companies whose incentives are to preserve their dominance over the distribution ecosystem, the FCC should look very closely at this deal and ask whether it serves the public interest and competition.
And if they need any help answering, we’ve got plenty of pointers.