Q&A: It’s all about FANGAS (Facebook, Apple, Netflix, Google, Amazon and Snapchat)
After the news that AT&T had a deal to buy Time Warner for $85 billion, entrepreneur, sports owner and part-time Donald Trump thorn Marc Cuban tweeted back at me after I posted a Politico story about Democratic VP candidate Tim Kaine expressing possible opposition to it.
— Mark Cuban (@mcuban) October 23, 2016
That’s an interesting argument. So I asked him to expand on it, via an email Q&A. And, of course, we talked about Twitter’s fate, too.
Kara Swisher: Can you further explain on your premise that this is more like Facebook with its acquisitions? I am assuming you mean that this is the future of media, although government does not get this.
Mark Cuban: Correct.
In the past we went to media. Now media comes to us. How it is presented is changing by the day.
The split in how we consume media, entertainment and information has evolved from purely analog, to digital representations of old analog (digital books, TV, magazines, etc.), to websites, to mobile, to apps. And now we are seeing glimpse of delivery via messaging systems.
Facebook is a leader, if not the leader in app-based and now messenger-based delivery of all the above and trends are all in their favor.
The acquisitions of Instagram and WhatsApp put Facebook (who gets credit for making both work and growing their base) cemented their leadership position.
Just think how different the content landscape would be if Instagram, WhatsApp and Oculus (which positions them for if and when VR takes off as a content delivery platform) were independent companies.
Look at the impact Snapchat is having, because it decided to stay standalone. Can you imagine where the content market would be if Facebook bought them?
What is the danger of Facebook assembling all these assets, if any?
I wouldn’t say it’s a danger.
It’s not so much about Facebook as it is about all the FANGAS companies (Facebook, Apple, Netflix, Google, Amazon, Snapchat).
All have content plays that are dominating our attention and grabbing more of it by the day.
I used to steal a quote from Aaron Spelling to explain the popularity of TV. He defined TV as “the best alternative to boredom.”
TV is no longer the best alternative to boredom.
To kids not old enough for Snapchat, music is the best alternative to boredom.
For Snapchat users, it’s the best alternative to boredom.
For Facebook/Instagram/WhatsApp, Netflix, Prime/Twitch, YouTube each now offers a better alternative to boredom than TV for anyone under 30.
Those trends will continue.
Traditional TV will have to innovate their TV delivery software in new ways beyond just offering their content in an app in order to change the viewing erosion of TV.
All TV is now digital. It’s a platform ripe for innovation, we just haven’t seen any beyond picture quality changes. That’s a secular problem.
AT&T/Time Warner could innovate in this space .
What is the danger of AT&T getting Time Warner, if any? Or is it just an old media move?
There is no danger. It’s a complimentary group of assets that still have to be made to work together.
It starts to give them enough weight to compete with Facebook, Apple, Google, Netflix and Amazon, if — and only if — they execute as well as Facebook has with Instagram and WhatsApp.
AT&T/Time Warner also now has something that the FANGAS have, that Time Warner never had. They can finally know who consumes their content.
That’s a dramatic change that gives them a chance, but not the assurance to compete with the FANGAS companies.
This may also give them the chance to deal with any challenges that arise from the Apple/Google app onramp duopoly.
Right now, the entire app-based content industry is at the mercy of those two companies.
We need more companies that have the size to respond if Apple or Google do something that is anti-competitive in this space.
Should the government allow these combinations?
They didn’t stop Verizon from acquiring content companies. Verizon has been smart to take the path they have. They learned first-hand the difficulty of trying to get into content delivery via an app.
[AOL head] Tim [Armstrong] and [Verizon CEO] Lowell [McAdam] are both incredibly smart. They were first to take this approach. They saw the importance of gaining content.
AT&T/Time Warner is different only in scale. The approach is the same. Go full stack.
Is our government equipped to understand the new media landscape?
Depends on who wins the election. Clinton yes. Trump no.
Who is buying Twitter, if anyone!
Twitter can fix its problems. Until they do, the only company that will look to acquire them is one who thinks they can use Twitter’s fire hose as leverage to dominate the MAD space (machine learning, artificial intelligence, deep learning).