Our monster island of media companies

Lorie Shaull, via Flickr.

You’ve never heard of him, but judge Richard J. Leon, first appointed to Washington DC’s district court by George W. Bush in 2002, is now among the most important figures in the history of American communications. In 2011, he created the media world’s version of Godzilla by approving the acquisition of NBCUniversal by Comcast, the largest provider of cable and internet service in the country, under conditions imposed by the Department of Justice’s antitrust division. Yesterday, he created Mothra.

Leon’s approval of cable, phone, and internet company AT&T’s purchase of Time Warner, a media giant that has had many suitors over the years, is all the things you’d expect from vertical media consolidation: It’s likely bad for newcomers to film, TV, cable distribution, cell phones, and sundry other businesses the two companies have devoured over the years. It’s almost certain to result in a period during which executives at the combined company scour their middle ranks for “inefficiencies” in an effort to run a megabusiness that is bigger than the previous two combined, but with fewer salaried employees. And in an immediate fallout from the approved AT&T deal, Comcast on Wednesday offered $65 billion to buy 21st Century Fox, kicking off a bidding war with Disney.

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But AT&T–Time Warner may not actually be a monopoly in the strictest sense, purely because it provides the first real competitor for Leon’s previous creation: Comcast, heretofore unique in the world as a producer-distributor of movies and TV over its own cable and internet pipes, can no longer trample the Tokyo of our entertainment programming with complete impunity. Now it must reckon with a second screeching monster of laissez-faire antitrust regulation, which also owns a passel of cable channels, a big movie studio, a bunch of legacy IP it can make into toys and cartoons, and fiber-optic cable across a big chunk of the Eastern Seaboard.

Leon, randomly assigned to the AT&T case, cuts an interesting figure—a product of farsighted Bush-era judicial appointments that put comparatively young libertarian-leaning judges into important seats. Leon’s rulings are not always textbook conservatism, but they are reliably anti-regulation, including a 2016 injunction saying that the city of Washington must issue concealed-carry permits to gun owners whether or not applicants have “a good reason,” as the municipality required.

And with this latest ruling, Leon hasn’t just paved the way for more vertical integration; he’s raised the barrier to entry in the media world to the size of B-movie monsters.

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Of course, it’s the consumers, who’d rather not be fighting with anyone, who will be caught between the two warring behemoths. The legacy TV industry needed an answer to the rise of streaming video, which seemed to give consumers plenty of entertainment for far cheaper than they’d been used to. In answer, those legacy companies have consolidated: AT&T and Comcast don’t just own the cable that runs into your house, they own double-digit percentages of one of the subscription-based apps that makes their programs available to watch on TV, Hulu. Once the regulatory smoke of the current administration clears, it’s fairly certain that one of Hulu’s current stakeholders—either Disney or Comcast—will own 21st Century Fox, another minority owner, as well. (Think of whoever that turns out to be as Megalon.)

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The upshot of all this is fairly predictable. With the rise of Netflix, the average TV watcher thought he or she was going to finally get out from under the onerous triple-play deals and rapidly expiring introductory offers that had caused cable subscriptions to balloon to a national average of nearly $200 in the early 2000’s. But they may just end up paying for the physical connection and the programming separately. And the checks will all go to the same places they were going before.

And media consolidation affects the programming itself, too, which tends to recycle tried-and-true intellectual property into whatever the least risky form seems to be at the moment: For example, NBCUniversal bought the rights to the old rubber-suit Godzilla movies when it acquired DreamWorks in 2016. DreamWorks acquired the films when it purchased Classic Media for $155 million in 2012. Classic Media, in turn, acquired the films when it purchased animation studio UPA, which had bought US rights in perpetuity from Toho, the company that owns the characters and produced the original films so it could run them on American TV late at night.

Time Warner’s flagship movie company, Warner Bros., distributed the last English-language Godzilla feature in 2014, which wasn’t very good but made a lot of money, and will put out a sequel next year. Mothra shows up.
Toho released its own Japanese-language Godzilla flick, Shin Godzilla, last year. It was much better than its recent American predecessor, but none of the major companies distributed it in the US and nobody saw it, so the sequel got canceled. Toho is planning a Marvel Comics-style Godzilla Cinematic Universe, instead.

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Sam Thielman is the Tow editor at Columbia Journalism Review.