Sun Valley: Do media companies still need to be conglomerates?

July 10, 2009

Media moguls and executives at Sun Valley spend a lot of time talking about how to best prepare for the challenges of Web and mobile disruption in the 21st Century.

Companies that once traded and leveraged their huge size and scale of distribution are now considering whether just being bigger might not necessarily be better in the new fragmented media world.

For example, Time Warner Inc is slimming down by spinning off its Time Warner Cable unit and AOL, its Internet division. It may also look to rid itself of its Time Inc publishing unit.

“The notion that there are synergies between content and distribution has been dispelled,” says Tuna Amobi, an equity analyst at Standard & Poor’s. “You’re not going to see a Comcast Corp trying to merge with a Disney anymore.”

Not everyone agrees. Sony Corp remains one of the world’s largest companies with major interests in a global empire that spans music, movies, video games, software, mobile phones and consumer electronics.

Sony Chief Executive Howard Stringer said in an interview with Reuters that it had become more important to be able to integrate and leverage its different units. “We wouldn’t have been able to win the Blu-Ray war if we didn’t have content,” he said.

“You can’t create this in a vacuum any more. You have to have a relationship. You don’t have to own something, but obviously if you own something you have a leg up.

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