By this time next year, AT&T won't just be a wireless carrier — it might also be one of the biggest media giants out there. The company has agreed to buy Time Warner Inc. for $84.5 billion, which will lead to the creation of a new streaming service that will tap Time Warner brands such as HBO and Warner Bros. in order to compete with traditional cable.
As reported by The Wall Street Journal and later confirmed by AT&T, the deal is expected to close by the end of 2017. By then, you can expect a new type of streaming media package aimed specifically towards your mobile device that will offer content from the likes of HBO, CNN, Cartoon Network and Warner Bros. Entertainment.
A New Option for Cord-Cutters
"We will always have big-screen TVs in our home but mobile video is what our customers are demanding," said AT&T Chairman and CEO Randall Stephenson in a video announcing the deal.
It's unclear how this emphasis on mobile will play out in the final product, but it's easy to imagine an AT&T-owned streaming service that allows AT&T customers to watch all of the content they want without eating up data, a la T-Mobile's Binge On promotion.
It's possible that AT&T will fold all of these features and content brands into DirecTV Now: a yet-to-be-released cord-cutting service announced earlier this year. DirecTV Now was slated to have both standard and mobile-only payment tiers, which seems in line with AT&T's current focus on getting premium content to your smartphone.
AT&T's streaming package will likely be competitively priced against standard cable and competing internet TV services. The company says that owning Time Warner's content will allow it to "innovate on new advertising options" that could keep the cost of its service down.
AT&T Owning Entertainment: Pros and Cons
Naturally, AT&T owning Time Warner could have implications that stretch way farther than a new streaming video service. The deal will give AT&T access to such iconic brands as DC Comics and Harry Potter as well as the multitude of other properties that sit under the Warner Bros. Entertainment banner.
This could be a plus for consumers — just imagine AT&T backing the Netflix-style Batman show you've always wanted — but it could also go south. If AT&T starts offering its customers exclusive access to new Justice League clips or first crack at the next big WB video game, it would face some serious scorn from those outside its network.
This is the type of regulatory scrutiny that AT&T is likely to face for the next few months. Some consumers may be understandably concerned that content from the likes of HBO and WB will get preferential treatment on AT&T's network, though Stephenson promised that "there is no competitor being removed from the marketplace" as a result of the deal.
As CNN Money reports, both Hilary Clinton and Donald Trump plan to have the deal examined closely should they take Presidential office, which could lead to a delay for AT&T's upcoming streaming service. However, if it does get thumbs up across the board, AT&T just might find itself with a content-rich, affordable and mobile-friendly TV plan that could get the rest of the streaming industry to take notice.
A 5G Future
Aside from ushering in a major new streaming service, the AT&T/Time Warner deal could accelerate AT&T's plans to embrace blazing-fast 5G network speeds. In an interview with The New York Times, Stephenson said that it would utilize 5G speeds not only for wireless cell phone service, but also for high-speed internet and television packages. AT&T first announced its plans to test and deploy 5G service earlier this year, with the first round of trials expected to wrap up in 2018. With Time Warner's resources under its belt, it's possible that AT&T could get 5G to the masses even faster.