AT&T To Buy Time Warner – Bad News for Consumers

October 28, 2016

Good news AT&T and DirecTV customers! Your cable packages might be getting a significant upgrade here in the near future. AT&T and its subscribers will have the opportunity to obtain access to HBO, CNN, TNT, Cartoon Network, TBS, and Warner Brothers. This is due to the recent agreement for AT&T to purchase Time Warner for $85 billion dollars. However, if you are one of the many Americans who do not subscribe to AT&T, this could be bad news for some of your favorite shows and programs broadcast by Time Warner.
With the increase of online television subscriptions, such as Sling TV, Amazon Prime, Hulu, Netflix, and PlayStation Vue, traditional cable subscriptions have taken a downturn. AT&T is one of many cable providers who are looking for another avenue to increase their viewership. AT&T is doing this by purchasing Time Warner so as to acquire rights to Time Warner subsidiary companies such as the ones listed above. However, this creates a problem. AT&T is a cable provider not a content producer. Time Warner creates content and enjoys the ability to sell its content to anyone who expresses an interest in buying it.  With this marriage with AT&T, Time Warner loses this ability.

A company that owns pipes, whether over the air or through the ground, doesn’t actually benefit from owning the content flowing through those pipes.

 
If this merger is approved, it has potential to create two significant problems. First, it may deny access to popular television and movie content because AT&T will most likely be reluctant to sell its newly acquired content to competitors. There is already such a small number of cable companies, with many places only having two viable options, AT&T or Time Warner Cable, that anyone not paying for AT&T may not be able to gain access to certain content. While regulators will most likely make AT&T adhere to certain stipulations regarding harboring its content, regulators cannot control AT&T in regards to all of this newly acquired content.
The second problem it creates is that, because this is a marriage of mismatching companies, more people are going to leave traditional cable companies for Internet based TV. This relates directly back to the first problem in that, as more people leave traditional cable companies, more people will be losing access to this popular content and AT&T’s acquisition of Time Warner will essentially be pointless. Unlike AT&T’s acquisition of DirecTV, which made total sense because they were matching companies, this merger with Time Warner does not make much sense unless everyone in America who wants to view popular Time Warner content starts subscribing to AT&T’s network.
Now, there is a realistic chance that regulators will get it right, Time Warner will still have some direction on how their content is distributed, and AT&T won’t be stingy with its content. In a perfect world right? However, to be realistic, there will be several popular television shows, movies, cartoons, and even sports that are going most likely going to disappear from your television subscription if you don’t pay for AT&T. So will you make the switch to AT&T to keep your favorite shows? Well AT&T sure hopes you do and you won’t be alone if that happens.