AT&T and Time Warner, out of nowhere, announced an $80 billion merger that would combine the telecommunications giant with the sprawling media company. AT&T is best known these days for its mobile service, but it also operates DirecTV, U-verse cable television, landlines, and provides broadband internet in some parts of the country. Time Warner, meanwhile, dabbles in everything from movies (Warner Bros. and New Line Cinema) to television (CNN, HBO, Cartoon Network) to comic book publishing (DC Comics).
In other words, if this merger goes through, it’s going to affect how you watch TV. And if it collapses, it might affect your retirement account, to boot.
Your Favorite Shows Will Disappear From Netflix
The most noticeable effect will probably be that streaming services will get even more partisan and fractured than they already are. AT&T subsidiary DirecTV is already gunning for Netflix with its DirecTV Now service, which AT&T is offering as part of its mobile systems. And if this deal goes through, AT&T owns the Warner Bros. catalog.
So, unless government regulators step in, expect shows like Friends and Smallville to disappear from Netflix, and HBO’s back catalog tovanish from Amazon Prime once any contracts expire. And don’t expect to find many Warner Bros. shows or movies to appear on Netflix or Hulu if it can possibly be avoided contractually, although CW fans will still be catching their favorites on Netflix. AT&T is likely planning to keep the big, attention getting stuff for itself, which includes the DC superhero franchises, Harry Potter, and Lego movies.
Hulu’s Fate Is Uncertain
Time Warner owns a 10% stake in Hulu, alongside Comcast, which means two bitter rivals for your cable dollar are now begrudgingly “friends” insofar as the streaming service is concerned. Just what, exactly, this means for Hulu is a bit up in the air. AT&T will probably honor any contracts Time Warner has with Hulu, and the ownership stake is fairly important for pushing certain Time Warner properties. Still, now Hulu is in the unenviable place of potentially being part owned by a direct competitor; AT&T might resolve the problem by selling off its stake, but that would also leave AT&T with no obligation whatsoever to provide Warner Bros. content, like the Adult Swim shows, to Hulu.
Expect a Hard Sell to Buy TV with Your Smartphone Service
AT&T had an investment in you buying television access every month instead of streaming content before it bought Time Warner. Now it may own HBO, TBS, and CNN, plus all the related channels — ten major cable networks in all, not to mention a stake in the broadcast network The CW. So if you get your cellphone through AT&T, expect the hard sell to sign up for DirecTV, probably in the form of a bundle. Not that AT&T will be alone in trying to sell you cable, internet access and mobile service in one package: Comcast has tricked Verizon into helping them do exactly that.