Eager to consummate its proposed purchase of DirecTV, AT&T is putting together big plans to transform itself into a leading TV Everywhere (TVE) player.
AT&T Inc. (NYSE: T) Chairman & CEO Randall Stephenson highlighted its ambitious multiscreen video plans on the company's fourth-quarter earnings call with financial analysts late Tuesday afternoon. He explained how AT&T intends to use its wireless assets and DirecTV Group Inc. (NYSE: DTV)'s satellite TV assets and content rights to distribute video programming to every video-capable device a mobile customer might have by the end of this year, assuming the deal still passes federal regulatory muster as expected. (See AT&T: Merger Review Halt Won't Hurt Us.)
"It looks really good to be able to sell video into all of these channels," Stephenson told analysts on the call. "Our customers are demanding that video be delivered across any device, and one of our primary objectives coming out of the close of this deal is to take advantage of the content relationships DirecTV has."
Stephenson said AT&T also intends to make good use of Otter Media, the $500 million OTT programming joint venture that it launched with the Chernin Group last year. "We're looking at multiple channels and channel lineups that we will be able to offer to our customers," he said, promising that there will be more news and deals to come. "This is a high priority for us to deliver video to tablets and mobile handsets."
The AT&T chief said his company -- which still hopes to gain federal regulatory approval of the DirecTV purchase by the end of June despite a legal challenge to the merger review process by content rights holders -- is even more bullish on the deal than it initially was early last year. He credited that enthusiasm to the discovery that the deal's revenue and cost synergies both look markedly greater than they originally did, now that AT&T officials have begun digging into DirecTV's books.
"We're starting to see details on channels and channel costs," he said. "As a result, we're seeing better opportunities than what we baked into the original deal … it's looking better across the board."
While he said AT&T executives remain "fairly confident that this deal gets done in the first half of the year," Stephenson conceded that the regulatory approvals could still get held up by the dispute over public access to sensitive content rights information. "That's the big unknown," he said. He's hoping that an upcoming federal court proceeding will help clarify the issue.
— Alan Breznick, Cable/Video Practice Leader, Light Reading