AT&T Buyout of DirectTV is a Disaster in the Making

According to Reuters, Mega Telecom company AT&T is looking at buying DirecTV for $50 million. You are going to see a lot of these mega mergers happening in the next 5 years. Why? Because outdated business models who have made billions during the information age are struggling to maintain marketshare, and their mentality is “do more of what we’ve done in the past and on a bigger scale.” This methodology however, will ultimately fail. Why? Because the information age is dead, and the collaboration age has begun.

This method of capturing marketshare is a typical pattern with big telecom.  If you track the history of mergers & acquisitions, they buy up competitors, create a monopoly, become deregulated and start all over again.

The advantages of this deal are almost all for AT&T in the short term, and very few for the customers. But they will both lose in the long term. They will bill this as their ability to provide better service and wider selection, but that’s just a fancy way of saying they will charge the consumer more.  However, due to the collaboration age, this is going to eventually backfire for them because this model of “buy everything, control everything” no longer works.  They will eventually buy a bunch of junk that nobody wants, and DirecTV might just be the first sign of that junk.  Why do we need Direct TV anymore?  We can watch every show we want online through collaboration apps like Netflix, Hulu and Amazon Prime. And the moment big telecom thinks they can come in and buy those companies out (which they will), new ones will pop up that give us access to this information faster, cheaper, and easier than having to sit at home between the hours of 10 and 4 waiting for some guy to show up in a van and get us connected.

Consumers are fed up with big telecom trying to find ways to squeeze pennies out of them and it’s a model based in the information age which has all but died.  They still think that if they own all the information people will pay for it.  But they are wrong, because people nowadays will just share the information they already own.  AT&T needs to ask themselves how they can partner up with their customers, not their competitors.