AT&T’s proposed $48.5 billion acquisition of DirecTV will accelerate its plans to offer an Internet television service.
AT&T Chairman and Chief Executive Officer Randall Stephenson said DirecTV holds established entertainment industry relationships that will help speed the company’s efforts to deliver video via mobile devices and high-speed Internet service. He told Wall Street investors that he anticipates offering an Internet TV service within 12 to 18 months of the deal closing.
“This whole idea, this whole vision, of delivering video on all screens — the more we looked at this and evaluated it … the more we need to be scaled in video,” Stephenson told Wall Street analysts on a call Monday. “If you believe you need to be scaled in video, who is the best video play out there?”
AT&T joins Sony and Dish in the list of big, well-capitalized companies with content relationships who say they want to sell TV over the Web. That doesn’t mean any of them will actually do it, though.
In January, Sony announced it would sell Web TV, using its Blu-ray players and Playstation game consoles as streaming hubs, but didn’t have any rights deals at the time it issued its press release. In March, Dish announced that it had the rights to sell Disney channels like ESPN on the Web, and that it would launch a service later this summer. But in its last earnings call, Dish pushed the launch date back to the end of the year.
Other possible “over the top” players include Comcast, which has been working on a service for some time, and Verizon, which purchased the Web TV project that Intel built but didn’t launch.
Stephenson said DirecTV’s strong customer base and brand made it the best fit for AT&T as it pursues its video ambitions. Whereas the last six years have been dominated by building out wireless and broadband networks to support copious amounts of data, he said, the next six years will be defined by delivering entertainment to myriad screens – on the TV, on mobile devices and on the go, in cars and on planes, he said.
“That was the key rationale for trying to do something with DTV,” Stephenson said.
AT&T signaled its strong interest in over-the-top video earlier this month, when it struck a partnership with one of Hollywood’s most savvy digital players, former News Corp. Chief Operating Officer Peter Chernin. They formed a venture pledged to commit $500 million to acquire, invest in and launch Internet video services.
The deal now heads into regulatory review.