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Why Did ATT Add Turner to Its DirecTV Now Service?

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Turner’s availability on DirecTV Now

AT&T’S (T) DIRECTV Now, a new OTT (over-the-top) service, seems to be on track to launch later this year. According to a FierceCable report from September 20, AT&T added Time Warner’s (TWX) Turner networks to its DirecTV Now OTT service.

According to the report, with this agreement, DirecTV Now has now added around 100 channels to its service including Comcast’s (CMCSA) NBCUniversal and Discovery Communications (DISCA).

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The FierceCable report cited AT&T’s Chief Content Officer Dan York, who stated that, “The Turner agreement adds more premium content to our already robust line-up of DirecTV Now channels available to customers when it launches this year,” He further stated that, “We’re also pleased to extend our relationship with Turner and provide our customers with access to its content across all AT&T platforms and products.”

Turner’s content monetization strategy

Time Warner’s (TWX) Turner business division earns the majority of its revenues through subscription and advertising. It earns the remaining revenues through content licensing. In fiscal 2Q16, subscription revenues made up 49% of Turner’s total revenues of $3 billion.

During its company’s 2Q16 earnings call, Time Warner was asked if Hulu would be central to its content distribution strategy, and the company suggested that it was looking at different ways to monetize its content, not just with Hulu but with other OTT (over-the-top) services. The company’s Turner business segment is also increasingly focusing on original programming.

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