AT&T to launch streaming service after $85b Time Warner purchase
AT&T has revealed in a filing to the United States Securities and Exchange Commission that it is looking to launch a streaming service in the fourth quarter of 2019.
The SEC filing called the plans for a direct-to-consumer streaming service "another benefit" of AT&T's $85 billion merger with Time Warner.
"We are committed to launching a compelling and competitive product that will serve as a complement to our existing businesses and help us to expand our reach by offering a new choice for entertainment with the WarnerMedia collection of films, television series, libraries, documentaries, and animation," AT&T said in the filing.
"We expect financial support to launch this product to come from a combination of incremental efficiencies within the WarnerMedia operations, consolidating resources from sub-scale D2C efforts, fallow library content, and technology reuse.
"We expect to defer some licensing revenues to later periods in the form of increased customer subscription revenues."
US District Court Judge Richard Leon ruled in June that AT&T could proceed with its Time Warner purchase to create a telecommunications-media giant, despite the Trump administration opposing the deal and the Department of Justice (DoJ) suing to block it.
At the time, AT&T general counsel David McAtee said that AT&T would be closing the merger before June 20 "so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative".
CNET: AT&T's Time Warner takeover knocks over media and tech dominoes
AT&T then closed the deal in mid-June, completing the takeover to give customers a "differentiated, high-quality, mobile-first entertainment experience".
The DoJ filed its appeal against the ruling in August, citing a "clearly erroneous" decision by a judge who made "fundamental errors of economic logic and reasoning", the government appeal argued.
According to the government, the ruling relied on "two fundamental analytical errors: It discarded the economics of bargaining, and it failed to apply the foundational principle of corporate-wide profit maximization".
A merger between AT&T and Time Warner would increase media prices for consumers, according to the government.
The deal was financed via AT&T issuing 1.185 million shares of common stock as well as $42 billion in cash.
AT&T followed it up by acquiring ad-tech company AppNexus in order to build a digital advertising arm to complement the Time Warner media offerings.
The carrier said it would integrate AppNexus' product managers and software engineers and use the company's tools to create digital TV advertising products.
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