One of the lovely bits of news that came out over the weekend was that AT&T will be purchasing Time Warner (not the cable company, but the media company that owns CNN and Netflix) for $85 billion. With Verizon buying Yahoo and AOL, media and entertainment is increasingly falling into the hands of service providers who are supposed to just be routing all of this stuff to users neutrally. But, that was never going to last, and now we’re onto phase two of the carriers’ plans for world domination. Only a couple days after the announcement of the merger, AT&T has unveiled plans to launch DirecTV Now (don’t forget, they own them, too), a $35 per month streaming package with over 100 channels, next month.
Sound familiar? It’s what Sling TV does, among a handful of others. The package, which was announced earlier this year and would be bolstered by the Time Warner acquisition, will put together 100 channels, including Fox, TNT, TBS, CNN, and NBC. While HBO is included in the Time Warner acquisition (should regulators clear it), don’t expect HBO to be part of the base package — as usual, it’ll likely be a premium channel that costs extra. According to a Bloomberg report, this is the first step for AT&T towards using internet streaming as the primary means of TV distribution — something that would allow them to save money by not having to worry about cable infrastructure, among other things (whether those savings would be passed on to customers is another matter).
In response to assertions that the deal will ultimately raise prices for consumers due to narrowing competition, AT&T CEO Randall Stephenson launched the charm offensive, telling the Wall Street Journal‘s Rebecca Blumenstein, “I’m not surprised [by the criticism]. They’re uninformed comments.” Stephenson is playing up the offer of 100 channels (none of which are “junk,” as he puts it) for $35 per month, which beats most cable packages handily, although Sling TV’s $25 plan for 40 channels is likely still enough for most.
In terms of net neutrality, AT&T customers will not be charged for data used when using DirecTV Now. That’s great for AT&T subscribers, but it’s not healthy for the marketplace, giving more incentives to people to get all of their services though AT&T. And, while Stephenson has already said that AT&T will not prioritize Time Warner content or slow down connection speeds for competing content, it’s worth remembering that AT&T was among the companies that poured in the most money to lobbies trying to defeat net neutrality. If they do play by the rules, it’s only grudgingly — and only for as long as they have to.