Should Cord Cutters Be Worried About AT&T Buying Time Warner?





Couple watching videos on a laptop at homeOver the weekend AT&T and Time Warner (the company that owns stations such as HBO and TNT not the cable company) came to a deal that would allow AT&T to buy Time Warner.

Although there are many possible hurdles that could cause this deal to fall apart—similar to how Comcast buying TWC fell apart—what happens if it does get approved?

AT&T has moved to become more cord-cutting friendly. They purchased DirecTV recently and are working on releasing a OTT streaming service based on the DirecTV brand. We are still not sure how cord-cutting friendly that will be; however, it is a good sign.

The real issue here is will AT&T seek to limit Time Warner content to AT&T customers and what about Hulu?

Let’s first take a look at Hulu.

Time Warner recently purchased a 10% stake in Hulu. Hulu is working on a competing Live TV service that will take on AT&T’s DirecTV NOW service that is expected to be released this winter.

However, Time Warner only owns 10% and does not have a board seat in Hulu. It is unlikely AT&T could do anything to stop Hulu Live. It is also likely that owning a 10% stake in Hulu will make them more likely to work with Hulu’s new live TV service.

Could AT&T Shut Down HBO NOW?

A lot of readers have asked if AT&T would shut down HBO NOW in an effort to force you to get DirecTV NOW. This is the most likely of the Doomsday scenarios but still not likely.

AT&T just paid a premium for Time Warner and word is HBO NOW has turned into a profitable service for Time Warner. We find it unlikely that AT&T would shut it down. If they did you would still have options with Sling TV and PlayStation Vue, which have long-term contracts to carry HBO.

So what is likely to happen now?

In the short term nothing will change and we likely won’t see any changes for at least a year or two. This deal is going to face a lot of government oversight that will likely take most of a year. Even if it closes it will take most of a year to consolidate the two companies into one.

I would expect the FCC to put similar rules and limits on AT&T as they did Comcast when they purchased NBC Universal. I would not be surprised to see limits that would force AT&T to honor existing deals and make Time Warner channels available to other service providers.

So I wouldn’t panic but I also wouldn’t be happy about this deal as a cord cutter.

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