American communications giant AT&T has just lifted a corner and shone a light on a key sector for investors to exploit.
Content is king is an old adage, but it proves to be true time and time again in the modern dog eat dog world of entertainment.
The big networks need prime content to attract users – that content can range from music to movies, books, games and TV rights.
And the communications and hardware industries are ready to fork out billions for a ready-made library stocked with good content.
That’s why AT&T has lifted a few eyebrows in the industry with a $85 billion bid to buy out entertainment giant Time-Warner.
That’s entertainment for you
Apparently, the firms have been talking through the deal for more than a year and have agreed the details.
All that needs to happen now is for shareholders to vote for the take over and regulators to approve the bid.
That regulatory approval might not be so forthcoming as a vote from happy shareholders about to make a great mark-up on their money.
If everything goes ahead, AT&T will transform from a communications firm to an entertainment hub.
The company will immediately see almost half of revenues generated from content. Time-Warner is the world’s third largest entertainment network.
Brands include Warner Brothers, HBO, CNN and DC Comics.
Game of Thrones to move?
Programmes and movies include Game of Thrones alongside the Batman and Superman franchises.
The latest TV hit to come out of the studios is science fiction series Westworld, a remake of the Yul Brynner movie.
The whisper is AT&T wants to green light a streaming video service that will outprice and outperform Fox – the US version of Sky TV. The service will run over AT&T’s broadband network and cut out the need for satellite dishes.
No doubt, Time-Warner’s content will air through the network first, stripping subscribers from Fox, the proud home of first runs of the hugely popular Game of Thrones.
AT&T is merely doing the same as BT in the UK – maximising the broadband network to provide cheaper and exclusive content streaming than their rivals.
For investors, the show may just be starting.