Thursday, May 14, 2009

Different Strokes

There's a marked schism appearing between media and telcom companies in North America and those in the UK. The dominant carrier in the UK, BT, is expected to unveil a horror story today as it announces results. The company still has a virtual monopoly over twenty five years after privatisation, but is made to look medieval in its business practices by US telcos such as Verizon and AT&T.

If you compare companies like Comcast and Virgin Media, it's pretty clear which is a well run company and which is a basket case, and the same goes for broadcasters.

So why is this ? Does the US have a natural advantage through economies of scale ? Or is it that the UK is an early adopter of many technologies and can be a difficult investment environment ?

Or is it simply that UK businesses have made one bad management decision after another ?

Personally I blame the regulatory environment which has encouraged skewed markets dominated by BT and the BBC.

As I have previously blogged, eight of the top ten (nine if you include Metacafe) online video services are US based. The inevitable consequence of all of this is that our media, and even our telco companies, will end up in American hands at knock down prices.

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