How Does AT&T and Time Warner View the OTT Market?

In the previous part of this series, we looked at AT&T’s (T) DIRECTV Now service. In this part of the series, we’ll see how AT&T and Time Warner (TWX) view the trend of OTT (over-the-top) services and how AT&T intends to develop its DIRECTV Now service.

AT&T stated in its fiscal 3Q16 earnings call that it intends to incorporate social media such as Facebook (FB) and Twitter (TWTR) into its DIRECTV Now platform. The company further explained that it would like its DIRECTV Now users to share content on social media through the DIRECTV Now platform.

However, AT&T also stated that when it comes to sharing content through its OTT platform, it has found it difficult to negotiate with content companies. That’s because these content companies have been reluctant to allow users to share their content on social media.

However, AT&T is optimistic that its acquisition of Time Warner would allow it to enhance its DIRECTV Now offerings since the acquisition would give AT&T access to premium content. Time Warner stated in its fiscal 3Q16 earnings call that it has a strong pipeline of original programming in 2017.

During AT&T’s fiscal 3Q16 earnings call, Time Warner’s CEO, Jeff L. Bewkes, noted that if the acquisition is approved, Time Warner will be combining with AT&T. He added that AT&T is Time Warner’s largest television affiliate that is the “best at mobile delivery.”

Time Warner said further that with the proposed acquisition, the combined entity wants “to bring more packages, more choice for consumers at different price points at every kind of level, upper, lower, more channels, fewer channels, more mobility, more innovation of the kinds of programming.”