AT&T Needs the Time Warner Content Factory to Survive

Big media distributors such as AT&T, which owns DirecTV and delivers movies and TV shows to 100 million subscribers of its wireless, internet, and video services, have argued for years over which can best withstand the disruption brought about by online services like Netflix: Content providers? Or cable and satellite operators? With his surprise $85 billion takeover bid for Time Warner, Randall Stephenson, AT&T’s chief executive officer, is betting that the companies that will thrive in a world of streaming and smartphones must be both. “The future of mobile is video, and the future of video is mobile,” Stephenson said on Oct. 22 after announcing the deal.

AT&T wants to offer programming wherever consumers wish—streamed to mobile phones or broadcast on TV. That’s why Stephenson is so hungry to own HBO, CNN, and other Time Warner content. Time Warner, which has a vast library of movies such as the Harry Potter films and TV series like Game of Thrones, is among Hollywood’s most prolific producers, with annual revenue of $28 billion.