The telecom industry is about to see two of its largest members become one. AT&T Inc.’s recent announcement of its planned $85 billion buyout and merger with Time Warner Inc. could potentially change the way people watch TV, make phone calls and interact with entertainment.
In an attempt to reflect the cultural shift to non-television forms of media, both companies claim that this merger will benefit customers by offering more streaming content and lower prices for services. However, there are many critics of the deal who claim that the merged company will try to take advantage of users by charging high prices and killing telecom startups who try to enter the industry.
Considering that many people view television with portable devices on streaming platforms such as Netflix, AT&T and Time Warner claim that this merger is designed to bring users premium content how they want it. More portable and less expensive is the general response.
In a press release, AT&T stated, “The future of video is mobile and the future of mobile is video.”
Following this ideal, the merger tries to combine the strengths of both the companies, Time Warner’s original content and AT&T’s mobile and cellular base.
Time Warner’s current content portfolio includes entities such as HBO, Warner Bros. and DC Comics. AT&T would now be able to offer consumers affordable ways to enjoy premium entertainment at a subsidized cost.
“I think (the customers) stand to be more satisfied,” said Tom Turner, visiting lecturer for business. “I think cable and phone customers in general are not super happy with either company. If you are an AT&T customer, you stand to have better services now and better support once they fully merge.”
AT&T would now have the rights to premium content like HBO, and some critics state that AT&T might have exclusive access to this content, meaning that someone with a Verizon device would not be able to access HBO
The publicly stated end-goal of the merger is to offer users a 100-channel premium streaming content package for a price of around $35, a subscription-based model. Consumers can get the channels they love and watch them on their phones or tablets without having to pay large cable bills. While the merged company could raise prices and make more money with its virtual monopoly, the CEOs of both companies have stated that their mission to keep users happy.
However, not everyone is happy.
“Personally, it’s probably not the best thing in the world,” said Ian Hulsey, the Information Technology & Services help desk team lead. “The more competition the better. It would be nice to have more options. Overall, I don’t think the impact’s going to be that great.”
The merger will not likely affect IT&S at Guilford College.
“It really shouldn’t (affect us), at least to my knowledge,” said Hulsey. “Our internet provider is Level 3. Time Warner is our phone service provider, and that part of the infrastructure shouldn’t change. Our network folks don’t seem overly worried about it.”
The merger of the two companies is also likely a competitive response to other recent mergers such as when Comcast Corp. bought out NBCUniversal Inc. or when Verizon Communications Inc. bought out AOL Inc. and Yahoo Inc. This trend is likely to continue as more companies will start to feel the squeeze of these merging multi-company giants in the free market.
“One thing that comforts me on the monopolistic side of things is that there are other companies in the spheres,” said Early College junior David Woodlief.
“It’s not like AT&T and Time Warner merging is the end of the world. You still have Dish and Comcast. So it’s not the end of the world, but AT&T now has a lot more sway in the market.”
Another way the merger would affect consumer culture would be through the use of more focused and targeted advertisements. With increased user information from Time Warner’s databases, AT&T can now show users better advertisements. For the users, they can benefit from being shown products and services they are more likely to purchase.
With the new plan to focus more on streaming content, competitors who currently offer streaming services like Netflix and Comcast must up their game now that AT&T is entering the space. This free market competition can lead to innovation and lower prices that will benefit buyers.
“Just from merging the two companies together, they are looking at how they can create more value for their customers overall,” said Turner. “But you also have to worry about who else can compete with them. They’re so big that they’ll have such a share of the market that they may be the only choice for the services that they offer.”
This proposed merger has many people at Guilford buzzing about how it will affect their lifestyles and the entertainment and economic culture as a whole. Whether customers will have more control over their streaming content or AT&T exercises control to raise prices remains to be seen.
Ultimately, the success of the merger comes down to one thing: is portable streaming media the future of television or just a passing trend?
