AT&T chairman and CEO Randall Stephenson had a simple answer for analysts wondering why it decided to spend more than $100 billion for Time Warner: speed and innovation.
On a conference call with analysts to discuss the deal that was announced Saturday, Stephenson said that soon after AT&T closed on its $48.5 billion acquisition of satellite TV distributor DirecTV last year, it realized that consumer video consumption was trending toward mobile devices. Although AT&T already had a massive wireless business, buying DirecTV accelerated the time it took to get mobile video rights. And now with Time Warner’s massive content assets—it owns Warner Bros. Entertainment, home of Warner Bros. Pictures and Warner Bros. Television Group, and a stable of pay-TV networks including CNN, TNT and TBS – that process speeds up even more.
“There are a lot of things we aspire to do in this platform,” Stephenson said. “As you begin to think how you share content, clipping content you’re watching and sharing with your friends via messaging or via social media; we know our customers are really demanding that. Trying to develop those types of capabilities with the current content providers is proving difficult. It’s arm’s-length negotiations and people are obviously very protective of their content. So it’s just really, really hard to get those types of innovations and iterations on content done.”
But owning a top programmer can clear the path for those deals, he added.