The Coming Era Of Mega Media

by Shelton Bumgarner

The more I think about it, the more it makes sense that we’re one recession away from something extraordinary happening to the worlds of telecommunications and content production and distribution. Once Net Neutrality is officially dead, the issue of access and content will again fuse like it did back when Yahoo ruled the online world.

At the core of it all is the cold hard fact that online advertising is based on a lie started by Wired on Hotwired about 1994 when they did the first banner ad. Online advertising is a lie because, well, it doesn’t work and never has. The whole thing is a lie. People just don’t notice online ads and usually when they click on then, it’s by accident. Of course, that causes companies to come up with any number of different ways to fake you out and present you with ads they feel you’ll want because of your online behavior. That, in fact, is the entire business model of Facebook and to a lesser extent Google (as I understand it.)

What I believe is going to happen is this — the top three Websites (Amazon, Google, Facebook) are going to buy the top three access companies (AT&T, Verizon, Comcast) within the next two, maybe four years max. Once that happens, a basic problem of the post-Net Neutrality world is fixed. What will happen is these new mega media companies will buy up all the smaller players they can find and begin to give consumers a wide-array of package options while making sure their individual offerings are part of the “basic” package.

So, here’s how it would work out in real terms — 80% of the population would be covered by three mega companies when it comes to access. The battle between these three mega media companies will likely be blood thirsty because they know once they lock you into their package offering, you’re unlikely to ever leave. These three mega media companies will have a vested interest in having as wide a selection of content as possible because they know if you have to pay to access content not owned by your mega media company you’ll be angry and maybe even switch companies. But at it core, you’ll have three options: commerce (Amazon), social media (Facebook) and, well, Google (Google.)

Let’s pause to reflect on what a direct battle between these three mega media companies would look like. Google obviously has the means, motive and opportunity to do a lot of damage simply because it has the resources. Now, let me be clear — all of this is back of the envelope predicting. I’m simply observing that companies who up till now have based their entire existence and business model on consumers having “free” access to them will have every reason to buy an access company once Net Neutrality dies. There’s always a chance that Google et al will find being access companies too much of a hassle and they’ll simply subside consumers access to them instead of buying an access company.

But having said all that — a direct battle between Amazon, Google and Facebook would be jaw-dropping. It would make a lot of sense if they bought up small and medium content providers so flesh out their offerings. The crux, again, is what would be the “basic” offering for your $60 a month Internet bill. That’s where it gets really interesting. It’s possible that in a weird way we’ll return to the days of three major broadcast TV companies, only online. The idea of a “portal” will come back in a big way, but with a completely different context. Everything in the “portal” you subscribe to will be throw in with your access bill and everything owned by a competing mega media company will cost more.

Things like email suddenly become very important again because access and content will be fused. It definitely makes a lot of sense that Verizon would buy both AOL and Yahoo and then, like, uh….park them. Maybe they have a hunch that portals will come back again and suddenly be very valuable? Why by *two* major ancient Internet brands. Could be they’re just misguided and lucky, because I could definitely see both AOL and Yahoo becoming valuable assets again.

Some wild cards exist in this new era. What does Apple do? What happens to Twitter, Spotify and Netflix? That’s going to be interesting to see how all of that shakes out. Once these tectonic forces kick in, Apple may feel forced to swoop in and change everything, buying, say AT&T after a bidding war with Facebook? Apple does have gobs and gobs of money and there comes a point where you make more money off of investing than interest on your savings. And I have a hunch Facebook would only get into the access business and turn itself into a portal if it felt an existential threat after the end of Net Neutrality.

I do think that the rise of mega media companies will possibly herald a new age of prosperity for small and media companies online for no other reason than, well, their original owners will cash out, they won’t be independent anymore and their content will be provided as a value added service in the context of any number of segmented Internet access plans. And, remember, none of this is going to happen in a straight line. One the next recession strikes and access companies feel they can begin to screw over consumers in a big way, it’s very likely mass chaos and panic will strike while things get sorted out. So it could be very ad hoc in nature and done gradually over the next, say, 5 years in such a way that only in hindsight will we realize what’s happened.

And, as I keep saying, MX is just over the horizon. In other words, once VR / AR takes off in a big way, everything will be reset and all of this I’m talking about will be very, very moot.

Shelton Bumgarner is a writer and photographer living in Richmond, Va. He is working on his first novel. He may be reached at migukin (at) gmail (dot) com.

Author: Shelton Bumgarner

I am the Editor & Publisher of The Trumplandia Report

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