AT&T/Time Warner – a broad channel for your favorite channels

Interesting headline this week that the merger between Telcom giant AT&T and media powerhouse Time Warner was approved. While there’s the typical M&A case to be made for the move – vertical integration along the supply chain and synergies/cost reductions – there are interesting implications suggesting digital marketing could be key to their strategy. First off, the merged firm will own tons of key content, such as HBO, CNN and major sports broadcasting partnerships (NBA, PGA, MLB and more) to list a few, as well as the second largest distribution network on the most important content consumption channel – mobile. With mobile accounting for 70% of media consumption (comScore), AT&T-Time Warner will be able to optimize their content specifically AT&T mobile users.

This becomes especially important with the repeal of net neutrality, as Marcela pointed out in an earlier post. Now there are no regulations stopping them from providing the fastest, user-friendliest service for Time Warner content assets while offering slower, clunkier delivery for competitor content. They will also be able to offer unique bundles of content and distribution. I know my interest would be peaked if I could watch Game of Thrones and Westworld for free given a subscription to AT&T. HBO after all has 134 million subscribers to Netflix’s 104. Similarly, their rights for broadcasting certain marquee sporting events lends itself especially well to the mobile channel given the pronounced real-time need of sports viewing. This could lead to interesting bundles for die hard sports enthusiasts. As a consumer, it’s important to me that my information hub allows all the content I might be interested in to be offered seamlessly, even if I have to pay up, however I would certainly be enticed if content I strongly valued was already provided at a discount to current prices as part of my subscription.

This reminds me of how google paid Apple big bucks to have Google search as the default page and then went ahead and built its own phone to the same end. It will be interesting to see how the merger will impact content availability and consumption on the all-important mobile channel – hopefully for the better.