Everything you need to know about AT&T’s deal with Time Warner

An explainer from the Washington Post on the AT&T Time Warner deal. Two points that stick out:

AT&T, the nation’s second-largest wireless carrier, is buying Time Warner, the storied media titan that owns HBO, CNN and TBS. In an unprecedented step, the deal is going to combine a gigantic telecom operator — which also happens to be the largest pay-TV company — and a massive producer of entertainment content.

It means that for millions of Americans, AT&T will control both the pipes of distribution and much of the shows, movies and other content that travels through the pipes. It’s hard to overstate the significance of this move, both in terms of scale and in terms of the ripple effects this will have on Hollywood, the cable industry, the cellular industry and the broadband industry.

In other words, AT&T may be about to own a huge trove of some of the most recognizable names in media. This is a big moment, because anytime you watch anything owned by Time Warner, that’ll be money in AT&T’s pocket. It’ll put AT&T in direct competition with companies such as Netflix and Amazon, giving it a big incentive to use its content and distribution platform as leverage against them. And it could spur a frenzy of other acquisitions, driving even more consolidation in the industry.

And:

The deal is already drawing loud protests from politicians on both ends of the ideological spectrum, at a time when national conversations about inequality have made critiquing large businesses a matter of populist appeal. U.S. lawmakers are already calling for an antitrust hearing on the issue.

The reaction from business analysts seems mixed; while many agree that buying up content is a natural move for telcos in an era of rapid convergence, some, such as Craig Moffett of MoffettNathanson, say it has only a 50-50 chance of succeeding with regulators.

This is far from a done deal. And Apple is still there, waiting in the wings.



3 thoughts on “Everything you need to know about AT&T’s deal with Time Warner”

  1. Is this really unprecedented? Isn’t Comcast already doing this? They own the pipes (cable TV and broadband internet) and a huge chunk of the content (NBC Universal, which also owns movie studios including Universal and DreamWorks.) They also have a deal with Verizon to provide cellular content.

    I don’t get why people are acting like this is something new.

  2. Whoops! I thought they were merging with the “other” time warner. The cable company that separated from the media company and is merging with another cable company and will eventually be rebranding as “Spectrum”.

    This merger makes more sense now that it’s AT&T/DirecTV merging with a media company.

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