You’ve heard the term, change or die, right? Well, AT&T is moving quickly with their Time Warner acquisition. First, they renamed it WarnerMedia. Next, they are planning to launch a brand-new streaming TV service in 2019. This will let them not only remain competitive in the pay TV space, but this will help move the entire industry forward.
First, they acquired DirecTV and created DirecTV NOW. Then they introduced wireless TV. Now they are taking their pay TV offering to a brand-new level with WarnerMedia. As part of this transformation, they are building their own Netflix-like pay TV service.
DirecTV NOW WarnerMedia is creating Netflix-like service
This service should launch late in 2019 and will compete with Netflix, Amazon Prime Video, the new Disney service and other new competitors in the pay TV space. In fact, if we pull the camera back, I get the strong sense, in coming years, this is going to become a newly competitive industry space with lots of major competitors.
While other telecom and wireless companies like Verizon, Verizon Wireless, T-Mobile and others have the same opportunity, and are in the pay TV market, they are not moving ahead as quickly or as deeply as AT&T DirecTV and WarnerMedia.
Two leaders in pay TV are AT&T DirecTV NOW and Comcast Xfinity
These other companies will play a role in the changing industry. However, there are two players which are leading the reinvention and convergence of wireless, pay TV and telecom. They are AT&T DirecTV NOW and Comcast Xfinity.
There are quite a few pay TV services that have popped up in recent years using the Internet to deliver programming to the user. These are typically lower cost, but don’t cover all the programming the customer wants.
Users think they will save money by using many smaller services. However, to get a complete package, users must sign up with multiple streaming services. When they finally get what they want, they typically spend as much as they would with a traditional pay TV offering like AT&T DirecTV or Comcast Xfinity.
As users finally realize this, I think it will be good news for growth among the major pay TV competitors, who are transforming both themselves and the entire industry.
AT&T will use HBO, Warner Brothers, Turner to fuel pay TV growth
AT&T says they will use their HBO, Warner Brothers and Turner assets they recently acquired to build their new slice of the pay TV pie. What this says to me is they are building and creating an entirely new experience.
They will build their pay TV offering both in direct-to-customer and in wholesale to other companies to offer to their customers.
TV is a relatively new space for them, but don’t let that fool you. In recent years, AT&T has grown to be the leader in pay TV services across the United States. First, they offered Uverse TV. Next, they acquired DirecTV. Then they created an IPTV version and named it DirecTV NOW. Then they created a wireless TV offering.
Over the last decade, AT&T has grown to be the largest player in pay TV. Now with their latest acquisition, they will take WarnerMedia and all the brand name networks it owns and create a brand-new offering. Something they will use to compete directly with Netflix.
The world of pay television and entertainment has been changing and expanding over the last few decades. The lines between different sectors are blurring. During the last decade new competitors like AT&T, Verizon, Netflix and many others have entered and completely transformed the traditional TV space.
The change wave is not over. It continues as AT&T not only successfully acquired DirecTV NOW, but also WarnerMedia. This is a transformational move the company is making.
Every competitor faces the same threat: Change or die
Remember, AT&T continues to grow, expand and to change. They started out as a long-distance giant. Then they acquired local phone companies, wireless companies and grew their Internet business. Over the last decade they entered pay TV and continue to acquire other companies and continue their growth.
They are also encouraging new competitors to follow them into this new world. Some of these other companies will also be successful as the industry transforms. Others will struggle. Some will even fail over time. But this is the new world.
With 5G we will see an entirely new group of competitors moving into the wireless pay TV space. And we are just at the very beginning of this change.
Something I’ve been saying for more years than I can count: companies, workers and investors must change or die. That describes the changing marketplace today. What that means is simple. It’s important to keep up with this change wave. If you don’t, it will continue to move and may leave you behind. As always, the choice is ours.
