An Analysis of AT&T’s Market Activities Following Time Warner® Merger

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After the acquisition of Time Warner®, AT&T® said that it is on an endeavor to become a media company. Recently, the Dallas-based telecommunications company acquired Warner Bros. Studios, Turner® and HBO networks. It has also announced a stream service titled AT&T® WatchTV, and acquired an advertising company named AppNexus for reportedly $1.6 billion. This acquisition spree and the service launch are indicators of a legacy Telco giant trying to reinvent itself as a rival to streaming services such as Netflix, and Facebook and Google.

Since marketers use AppNexus to purchase advertisement space from online publishers, it makes AT&T® into more of a rival to the two Tech scions with control of a majority of online advertising market. Further, AT&T® also hopes to lure mobile subscribers by streaming WarnerMedia’s content to mobile devices of users. With that, the goal of the best internet provider is to take advantage of their footprint, which includes millions of US customers who consume plenty of data.

There is also another reason why the Telco giant is hoping for that – DIRECTV® satellite subscriptions that has been on a cline of late. Streaming is now a big thing in this digital world; gone are the days where customers only seek best cable deals alone, but more of an alternative to that. It is now wonder why the Telco is also capitalizing on the streaming trend.

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“I believe the days when you can just create premium content and be a wholesaler of that content, those are over,” said AT&T’s CEO Randall Stephenson. The skinny bundle dubbed as WatchTV is an indication of the ISP’s ambitions to leverage business by monetizing around people’s affinity for streaming. Most operators offer skinny bundles to keep people from cord cutting, which means to rely on streaming over the web as an alternative to traditional cable service. AT&T’s skinny bundle, on the other hand, offers 30 channels and on-demand content with a namesake application at an affordable cost of $15 a month minus an unlimited data plan.

Besides a standalone offering, the Telco also offers an option to add WatchTV to their two unlimited plans announced recently. Further, what makes their behaviors akin to one that is aspiring to become a media company is the push for new advertising methods with commercial interruptions while customers watch channels on TV.

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