Content: A Key Factor in AT&T’s Acquisition of Time Warner



Time Warner’s content availability

Time Warner (TWX) has largely been a media company that offers popular premium content such as HBO’s (Home Box Office) Game of Thrones. In late October 2016, AT&T (T) announced that it will acquire Time Warner (TWX) in a stock and cash transaction of $107.50 per share, a 36.0% premium.

The transaction is valued at an equity value of $85.4 billion and a total value of $108.7 billion. AT&T expects the transaction to close by the end of 2017.

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AT&T expects that the proposed acquisition of Time Warner could create a giant that would combine Time Warner’s premium content with AT&T’s scale of distribution. The acquisition, if approved, could result in the combined company having access to a total of 100.0 million subscribers across television, mobile, and broadband.

AT&T also referred to Time Warner’s premium content in its fiscal 3Q16 earnings call. AT&T said that Time Warner has premium content that includes HBO’s Game of Thrones, Silicon Valley, and Veep.

AT&T also referred to Time Warner’s Warner Bros., which has successful franchises such as Harry Potter and Superman. Time Warner’s Turner Network is also a top-rated cable network whose shows enjoy high ratings.

Acquisition gives AT&T insights into viewership

The combined entity of AT&T and Time Warner will have access to 144.0 million mobile subscribers in the United States and Mexico and 45.0 million pay-TV subscribers in the United States and Latin America. The combined entity will have access to 16.0 million broadband subscribers in the United States.

AT&T’s joint venture with Otter Media and the Chernin Group could also result in 1.2 million subscribers across the companies’ various SVOD (subscription video on demand) services. AT&T also has 88,000 retail POS (point of sale) across the United States.

The rise in the number of subscribers should give the combined entity viewership insights into the kind of content preferred by subscribers across various platforms. This would help a combined AT&T and Time Warner tailor content to audience preferences.


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