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Why Rupert Murdoch’s plan to buy TimeWarner is the right move.

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We are coming to a cross roads, if we aren’t already there, in the way that people consume today’s media. Illegal downloading is rife. People are trying to come up with ways to try and stop it, but the thing is, by the time and idea can be implemented, technology has changed again. Ever since I can remember, you would record songs you like off the radio on to tapes, video record films off TV. Whats changed… the Internet. The speed at which today’s society operates and moves. The freeness at which information can be shared.

Newscorp and it’s current subsidiary companies produce shows, magazines, and news but do they produce enough?? They report the news then put their own political spin on it, depending on the desired result and push it out into the public domain. They own different cable companies, like Foxtel (Aus), Sky (UK). They also have channels that play other peoples content and their own. But…

The issue they face, as has been proven with illegal downloads, is the world is changing in the way people want to consume their content. Be it, Music, Films, Tv Shows etc. People want it immediately after it has gone to air on traditional media. They want to consume it in their own time, when they want to watch it, rather than be dictated to by a cable company. And why shouldn’t they?

Why should people in Australia have to wait so long to get a program that has been shown in the US? There is no reason as to why, other than the loss of revenue for the cable companies!

The way technology is going it is the traditional cable companies that are going to lose out. Why? Because they don’t produce their own content. More and more people are turning to the internet to source and watch their content. Many channels now allow you to watch programs online which have been aired and are part of their back catalogue.

In the US, several cable companies are changing their ways. Allowing people to access the shows they have running, online, when they want it. Moving towards the way in which people want to view it. All part of their subscription fee.

With faster download speeds, and instant access using the internet, the snowball effect of people moving their viewing time to searching and watching on the internet is growing. Companies have to change and evolve or they will simply be left behind.

It is the right move for Rupert Murdoch and Newscorp because that way they stay in the game.

Part of Apple’s business model, with the Apple TV is that they are becoming a modern day cable company. However they are the link between the content and internet. Being easy to access and search. Their little black box provides an easy way to watch content, without having to type and search on a traditional internet page. They are the missing link between content creators and the viewing public. (Yes you can hook a computer up to your TV, or use your smart TV to access content or simply watch online.. but most people want to watch it on their large panel TV’s rather than a computer screen.

Gone will be the days where you subscribe to a cable service that has hundreds of channels filled with re-runs or programs no one really is interested in. Peoples viewing patterns will be directed to the programs they actually want to watch.

The subscription model will also have to change if companies want to survive. It will need to change to pay for what you actually want to watch. I personally watch very few TV shows. The only reason we have Foxtel is for Sport! Although I do like the documentary channels and I am a sucker for Friends and Seinfield re-runs.

The question then is how do you find out about these new shows if you can’t simply channel hop? Social media will play an even bigger role than it does already. You will find out from friends what is good. How do you know your friends are watching shows you will like. Well we are herd animals and we generally hang out with people who have similar tastes to us. We also choose to follow people on twitter which similar likes. So for programs to be a success, they will go viral on social media and gain an audience.

The best thing is with instant access to the media, you can read a tweet and go and watch the show when you want too, and join in the conversation. You wont have to wait a week for the next episode! Or you can watch past episodes to catch up with what everyone is talking about.

Media, is only one industry that people are starting to sell, using the internet, direct to end users. Cutting out the middleman. Streamline the efficiencies to maximise profits, reducing costs for consumers and companies alike. Kogan is a perfect example of this in the online digital goods space. Initially buying TV’s, branding them Kogan and selling them at half the cost of a bigger brand. All using the internet, selling direct to end users.

So with Rupert Murdoch’s plan to acquire Time Warner, they are buying their way into the future of content consumption. Those that control the production of media will be best positioned for the way in which people want to consume it. Those that are merely retailing products will be the losers. The internet is a game changer for a lot of different industries. More and more people will have access and faster speeds than ever before to buy direct from manufactures and content creators.

Those that produce content will be the winners. Buying TimeWarner is a smart and right business move. However monopolising and dominating the content isn’t good for consumers and could wield too much power in one persons hands, which is a bad move for consumers.

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