Monday, October 24, 2016

Clash of Cultures

The AT&T and Time Warner merger is a complicated deal. Complicated because it tries to tie up vertically the media/content and distribution business. I will leave that to the political types since mergers of this sort bring out all sorts of strange characters. The Law and Economics have little to play here and it is the Lobbyists and big money that rule the day.

The other issue is; how risky is this deal. The intent is to merge two dramatically different cultures; creative and operations. Telephone types are fundamentally order takers and order executioners. To be successful in a Telco first never make a mistake, have other people do that, and then fit the mold. Also do not try to be smart or creative. You are dealing with the most un-creative business in the world. Keep the stuff running, that's it. In wireless it is an asset business where the asset is the license. It is at worst a duopoly, AT&T vs Verizon, and a bunch of also rans. Keep the circuits running and send out the bills.

On the other hand Time Warner is creative, other than CNN that is. The creative business has a totally different group of people, risk takers, dreamers, deal makers, and LA types.

One wonders how in God's name these two cultures will ever work together. They are each 5,000 pound elephants, and they done even have the same DNA. The are different genera, not just species.

I saw this having first been at Bell Labs and then Verizon/NYNEX. I was at Warner in between. I loved Warner and the genius of a Steve Ross. On the other hand Verizon folks took a while to understand that profit had become revenue less expenses. They were fundamentally knuckle draggers, pole climbers, coin collectors, and followers of the Executive Instruction Manual.

Thus the real challenge is how a Texas operating company will blend with a New York/LA media company. And yes, somehow get a CNN stuck in there, whatever they do.