Author Archives: seancobb29

Telecommunications Firms and Their Increasing Expansion

Verizon has recently struck up a $21 million deal with the NFL to acquire the exclusive streaming right to next season’s week three match-up between the Baltimore Ravens and the Jacksonville Jaguars. The game will be played at London’s Wembley Stadium. The game will be distributed through three of Verizon’s subsidiaries; its AOL platform, its mobile video service go90, and site oriented towards the young male audience called Complex. Verizon will have exclusive global rights to the game, except in Jacksonville and Baltimore territory, where the game will viewable via local cable.

In February, Time Warner stockholders passed a vote in favor of the company’s proposed merger with AT&T. AT&T will acquire Time Warner for $85.4 billion. The argument that both of these companies are making in favor of this merger is that it is a vertical acquisition, meaning that the two companies are not direct competitors. This argument is how both companies plan on fending off the Department of Justice.

My point in citing both of these recent events is that the telecommunications industry, similar to other industries in the American economy, is becoming completely monopolized. Verizon has exclusive global streaming right to an NFL game next season. The millions of NFL fans in the US have no choice but to use Verizon’s services to watch a football game. Also, take a look at the different technological vehicles Verizon is using to stream the game. I remember being a first-grader and having my parents describe to me what email was, showing me their AOL address. Verizon began as a mobile phone company and has expanded into something that basically no consumer can avoid using.

In addition, AT&T’s merger with Time Warner is problematic for American consumers. I agree that AT&T and Time Warner are not direct competitors, but AT&T is a telecommunications company, and Time Warner is a cable company. AT&T is a distributor of cable television, also known as Time Warner. This cannot be good for consumers. Saying that this merger is acceptable because the acquisition is vertical is picking the lesser of two evils. Two competitors merging, or a distributor merging with a distribution company is bad for consumers either way.

My general point is that telecommunications firms continue to grow. The more they grow, I think, the worse off we all are as consumers. As the world continues to become more and more invaded by technology, these firms will expand their size and power, and we will be at their will.

 

Sources:

https://www.wsj.com/articles/verizon-strikes-exclusive-deal-with-nfl-for-streaming-game-1493834401

https://www.usatoday.com/story/tech/talkingtech/2017/02/15/time-warner-shareholders-ok-t-merger/97966564/

 

The Effects of Competition Between E-Commerce and Retail Giants

There is a very interesting recent trend in the retail and e-commerce industries that can be seen in the activities of the two leaders of each industry, Wal-Mart and Amazon. As the customer base for both firms has blended together, so too have the strategies of the industry leaders. Both Wal-Mart and Amazon have adopted new plans and policies that are ultimately turning the two retail giants into much more similar companies. The good news, of course, is that this is all for the benefit of consumers. And when we are talking about Wal-Mart and Amazon, the consumer base is almost the entire American population.

Wal-Mart has implemented a new discount policy to help its online sales, in a move more in Amazon’s direction. Large items that are expensive to ship will now be discounted if customers choose the in-store pick up option. Wal-Mart saves money by using its extensive fleet of delivery trucks to move these products from warehouses to stores, rather than the more expensive option, shipping to customers’ homes. The company has also made some large purchases of smaller tech start-ups to improve its online presence.

Amazon’s most recent plan seem to be a step in the opposite direction. They have been opening physical stores across the country, with the primary focus being on their grocery store. Although it is a physical store, it is not a traditional grocery store. Customers download an app that registers when they walk in the door. Then, as customers pick up items, it automatically adds them to their online cart, and charges them when they walk out the door.

The competition between these two industry leaders has two broad effects. Consumers will be better off, and low-wage employees will be worse off. The competition between these two giants has created a price war, in which the American consumer will always come out on top. And again, the massive size of these companies makes it safe to say that the vast majority of American consumers are affected by this. These two firms, and other firms in the industries, are adopting strategies to make it as cheap and easy as possible for our preferences, as consumers, to be met. The introduction of new technologies and internet shopping has only made that process move faster.

Unfortunately, the introduction of technology could severely hurt low-wage workers and small businesses. If stores like the Amazon grocery store start to catch on, which seems highly likely because they are incredibly efficient for consumers, then every other grocery store, and later on maybe just every other physical store, will have to adapt to Amazon’s technology. This will put small businesses that cannot adapt out of business, and will take away the majority of jobs in these stores, replacing them with technology.

Overall, the competition between companies like Amazon and Wal-Mart, and the blending of physical retailers with e-commerce and technology, is great for consumers, and will continue to be great. However, if I owned or worked at a grocery store, I would not be so optimistic about my job security a few years down the line.

Sources:

https://www.wsj.com/articles/wal-mart-to-discount-some-online-orders-when-picked-up-at-the-store-1491969661

-Sean Cobb