![](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/2016-11-08-ATT-and-Time-Warner-Image-1-of-2.png\")
<\/p>\nAlready a leader in mobile, fixed telephone and satellite television services, AT&T is apparently looking to boost content \u2013 by acquiring TV Network Time Warner. And, it\u2019s willing to shell out $85.4 billion for it.<\/p>\n
AT&T is already a provider of broadcast television services through DirecTV. But, as online video streaming rapidly takes over traditional pay-TV viewership, AT&T\u2019s proposed merger could be its ticket to stay ahead of the curve. To cater to a population increasingly hooked to their mobile gadgets, AT&T is apparently looking to beef up content for multi-device viewing. And joining hands with content maker Time Warner \u2013 owner of HBO and CNN – could just be the perfect catalyst for that purpose. The deal could reap rewards for AT&T, given a projected +25.5% growth in the number of mobile video viewers in the U.S. over 2015-2019 against the expected deceleration in the number of American pay-TV households across the same period.<\/p>\n
<\/p>\n
Source: Statista<\/strong><\/em><\/p>\n Source: Statista<\/strong><\/em><\/p>\n Recent GfK reports reveal that already about 25% of U.S. households don\u2019t subscribe to pay-TV. The trend is expected to only intensify in the next couple of years, with evolving technology such as the 5G spectrum to proliferate mobile video viewership.<\/p>\n Already, AT&T is set to launch its online streaming platform, DirecTV NOW.\u00a0 The merger should only make it easier and probably economical<\/em> for AT&T to get access to the extensive repertoire of movies\/TV series as well as new content from the Warner factory. The coupling could even spell an influx of advertisers hoping to leverage AT&T\u2019s data\/user base. All this could potentially get translated into lower prices for subscribers of AT&T.<\/p>\n Does the Merger Pose Threat to Competition?<\/strong><\/p>\n But the million-dollar question is: would the deal get the regulatory nod? Last year, the Comcast-Time Warner Cable proposed deal was deemed by the Department of Justice to violate competition laws. The deal involving AT&T and T-Mobile USA was blocked on similar grounds in 2011. However, unlike the cases mentioned above, the merger between AT&T (America\u2019s fifth-largest firm by profits and second-biggest wireless carrier) and Time Warner (the world\u2019s third largest TV network) would not be a horizontal merger since it involves the integration of a distributor with a content maker. So, chances are the proposed merger will not necessarily be seen as violating antitrust regulations.<\/p>\n Nevertheless, speculations are rife on the possibility of AT&T thwarting its rival broadcaster\/streamers from licensing Time Warner content at fair prices, should the union happen. Some are also pointing towards the likelihood of AT&T charging their subscribers disproportionately more for watching content produced outside of Time Warner \u2013 akin to the \u201czero rating\u201d concept in web browsing and thereby frustrating viewers\u2019 choices.<\/p>\n But, a potential antithesis is that AT&T\u2019s focus on bolstering content production\/distribution for online streaming could actually galvanize other players in the broadcasting\/media industry to up their game. That, in turn, should lead to more innovation \u2013 fueling competition along the way – to whet the burgeoning consumer demand for mobile videos\/online streaming.<\/p>\n Also, it is likely that regulators would approve the deal conditional upon AT&T agreeing to charge fair and non-discriminatory prices to other broadcasters\/online distributors for licensing Time Warner content.\u00a0 Regulators offered similar protection to video distributors in case of the Comcast-NBCU merger.<\/p>\n Bottom Line for Investors<\/strong><\/p>\n It is still too early to tell whether or not the AT&T-Time Warner deal will get regulatory approval. But, the proposal is yet another instance of companies seeking every opportunity to milk the growing consumer appetite for fast-evolving technology. And, that could eventually lead to more<\/em> choices in content, viewing devices and broadcasters for consumers.<\/p>\n Regardless of the status of AT&T\u2019s plans to acquire Time Warner, it\u2019s evident that broadcasters are looking for ways to diversify into more platforms\/devices and boost content to compete with rapidly growing online video streaming firms.<\/p>\n","protected":false},"excerpt":{"rendered":" Already a leader in mobile, fixed telephone and satellite television services, AT&T is apparently looking to boost content \u2013 by […]<\/p>\n","protected":false},"author":1,"featured_media":4122,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59,60,63,71,72],"tags":[],"class_list":["post-3573","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-professionals","category-institutional-investors","category-mitch-on-the-markets","category-private-client-group","category-steady-investor-news"],"acf":[],"yoast_head":"\n![](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/2016-11-08-ATT-and-Time-Warner-Image-2-of-2.png\")
<\/p>\n