This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why Fox Is Wrong on Time Warner, Google Should Close on Twitch


NEW YORK (TheStreet) -- The media business and the Internet industry are built on contradictory assumptions.

Media lives in a land of scarcity. There are only a limited number of cable channels, and there is only room for a few competitors. That is the assumption built into 21st Century Fox's  (FOXA) bid for Time Warner (TWX) -- putting HBO and CNN under the Fox umbrella would reduce competition and drive profits higher.

The Internet lives in a land of abundance. On the Internet you can change channels with the click of a mouse. So the idea that Twitch, which hosts live streaming shows, is really worth $1 billion to Google (GOOGL) begins, in the clear light of day, to sound like madness.

Jeff Bezos' Most Important Project Is Amazon Prime, and Everyone Is Watching

Apple's Ho Hum Quarter Is a Set-Up to Its Biggest Product Launch Ever

Which Retailers Are Leading the Digital Race?

But both assumptions may be wrong. Media are becoming more abundant, and the Internet is growing into scarcity. Why? Because clouds cost more money than studios. 

Fox first. A bunch of smart New York financial houses including Morgan Stanley (MS), Barclays (BCS), and Wells Fargo (WFC) are pounding the table for the Fox-Time Warner deal, based on a theme of "industry consolidation." The assumption is that, after HBO and CNN come under Fox control, there will be fewer companies competing for a limited number of cable slots.

But audience is no longer based on cable slots. The best evidence for this is Twitch itself. Twitch told Re/Code recently it now has 50 million unique viewers each month. 

What they are mainly watching is people like former Limp Bizkit front man Fred Durst and San Francisco Giants outfielder Hunter Pence play and comment on video games. If watching talking heads sounds crazy to you, then perhaps you haven't noticed how all the so-called news channels, including CNN, have evolved in the last decade to essentially offer the same thing, only they are discussing news stories in fancy studios.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs