AT&T Told to Sell DirecTV by Hedge Fund Investor

larry55

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I believe AT&T is very miss manages right now . To many iron in the fire to many acquisitions and will make bad decisions on what to do with thems.
 
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Jimbo

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I would say that the situation right now is like walking into a store that's in the middle of remodeling. They're still doing business but things are sort of a mess -- the store organization doesn't make much sense, there's sawdust on the floor, etc. But if you go away and come back in a few months for the grand re-opening, you say, "Wow! This is a really nice store!"

As for those services you name, here's what I think they'll offer by the end of 2020:

  • AT&T TV: main flagship cable TV service marketed nationwide to anyone with home or mobile internet, especially to customers of AT&T Fiber/Internet and/or AT&T Wireless
  • DirecTV: alternative cable TV service for those without broadband access, no longer widely advertised at the national level
  • HBO Max: main flagship direct-to-consumer streaming service (mainly featuring WarnerMedia's own content). Will have the option to add on the same packages of live channels that AT&T TV offers. Always contract-free.
  • HBO Go: free streaming app for subscribers who are still on traditional HBO. This will only apply to customers who subscribe through a traditional cable operator that has not chosen to distribute the new HBO Max in place of regular HBO. Customers who get HBO Max through their cable provider (or through a digital provider, or directly from AT&T/HBO Max) will use the HBO Max app. At some point in the early 2020s, after all the current distribution contracts for regular HBO have expired, HBO will cease to exist as a separate service and so will the HBO Go app. At that point, the only home for HBO content will be HBO Max.
  • DC Universe: niche app for super-fans of DC Comics, delivering access to years of back issues, along with some DC video content. Select original series on DC Universe, such as Doom Patrol, also appear on HBO Max.
These will all be dead:

  • AT&T TV Now: will simply morph into the live channel add-on option inside HBO Max
  • AT&T Watch TV: will become the new Starter package inside AT&T TV and AT&T TV Now (then HBO Max). But like the Plus and Max packages, Starter will also include HBO Max.
  • HBO Now: will have no reason to exist as a $15 standalone service featuring only HBO content when HBO Max will be available as a standalone service with all the same content plus much more for the same price.
  • Cinemax & Max Go: will cease to exist as a service or even as an ongoing brand. Past seasons of Cinemax originals (e.g. The Knick, Banshee) will reside exclusively in HBO Max. Any current Cinemax original series that continue to be made (e.g. Warrior, Jett) will be rebranded as "Max Originals," which is the name that WarnerMedia has revealed for their line of original series and films exclusive to HBO Max.





I can't imagine what else HBO Max could be merged into unless AT&T acquired *yet another* major media owner (e.g. Netflix or ViacomCBS or Discovery, etc.) to combine with WarnerMedia. Because right now, it's looking like HBO Max will contain just about everything that WarnerMedia offers, with the exception of live news and sports. It looks like those will remain exclusive to their CNN, TBS and TNT channels, at least at first. Although it sounds like they might offer a way to add that live stuff in to HBO Max (short of adding on a full bundle of live cable channels), so we'll see.

Now, I do think that there may be some risk in them putting virtually all their eggs into the HBO Max basket. Maybe it would be better to do what Disney is doing, where they break out mainstream/basic entertainment (Hulu) vs premium (Disney+) vs sports (ESPN+). ViacomCBS looks to be doing something similar: free ad-supported (Pluto TV) vs mainstream/basic entertainment (CBS All Access) vs premium (Showtime). Some might think it would have been better for WarnerMedia to keep HBO on its own as a pure premium (maybe folding Cinemax into to beef it up a bit more) and then had a separate mainstream/basic service featuring everything else that will be in HBO Max. I think AT&T is looking at Netflix, though, which is a one-stop-shop that includes everything they've got and they felt like they needed to go all-in on a similar service that could go toe-to-toe with Netflix.

We'll see how it plays out...
Can't imagine why they would want to go after Netflix ... once thier contracts roll thru, they will have little left other than thier Originals.
 

NashGuy

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Can't imagine why they would want to go after Netflix ... once thier contracts roll thru, they will have little left other than thier Originals.
Well, yeah, I do think Netflix will have a challenging stretch coming their way in the USA in 2020-21. They're gonna lose a lot of their licensed content and they're gonna be facing some major competition from traditional media players in the form of HBO Max, Disney+, a growing Hulu, plus whatever ViacomCBS does with their combined assets (which will likely continue to grow from additional merger/acquisitions). Oh, and then there's also the new Apple TV+ too.

That said, don't underestimate Netflix. They *absolutely* changed the game. They've blazed a trail that in many ways represents the future of television. They have a massive installed base of subscribers (among both cord-cutters and cable TV viewers) and they claim a lot of loyalty, particularly among the under-40 crowd.

So yeah, Netflix will lose Friends, The Office and Planet Earth, among other stuff. But they're cranking out a ton of new originals aimed at all sorts of viewer demographics and tastes. At this point, they've pretty much succeeded in weaving themselves into the popular culture, which is a HARD thing to do. If you don't have Netflix, you always kind of feel like you're missing out on something (at least if you're under a certain age). It'll be interesting to see how many Netflix original films receive Oscar and Golden Globe nominations next year.
 

theBruce

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i have written this before in the cord cutters forum,I care nothing about the licensed content like Friends and The Office ( i have seen it already), I have it for their original content and if you want content in 4K, Netflix is the way to go.
 
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Claude Greiner

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Which one of these is the plan where they have 4K HDR streams and starting using x264 to encode their 1080p videos instead of that sh!tty Zencoder platform? Because they should drop all the other services and go with that one. Zencoder based streaming services are absolute garbage.

Also, that $67 billion purchase of DirecTV will go down as one of the biggest business blunders in history. They could have rolled out fiber to the home to their entire footprint with that money instead of their current strategy of selecting a handful of houses to have fiber offered to them in a bunch of different markets. Right now AT&T claims to offer fiber in hundreds of cities but the truth is they only offer it to a select few houses in each of those cities so they are getting their ass whopped by cable anywhere in those cities that aren't lucky enough to be one of AT&T's cherrypicked neighborhoods/buildings. Cable's footprint is CITY-WIDE whereas AT&T's fiber footprint maxes out at maybe 10% of a city.

Fiber to the home being offered as ubiquitously as DSL would have ensured that AT&T would remain a viable competitor to the cable companies and have a product to deliver their streaming services over. Right now most folks are gonna have to sign up for an Internet connection from the cable company to stream AT&T's TV offerings in acceptable quality.

tl;dr: investing in satellite instead of fiber is a stupid move for a company in 2019 and it was a stupid move in 2015
Yeah I’m in one of those cherry picked neighborhoods. I got 3 providers behind my house that can provide gig internet
 

Jimbo

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Well, yeah, I do think Netflix will have a challenging stretch coming their way in the USA in 2020-21. They're gonna lose a lot of their licensed content and they're gonna be facing some major competition from traditional media players in the form of HBO Max, Disney+, a growing Hulu, plus whatever ViacomCBS does with their combined assets (which will likely continue to grow from additional merger/acquisitions). Oh, and then there's also the new Apple TV+ too.

That said, don't underestimate Netflix. They *absolutely* changed the game. They've blazed a trail that in many ways represents the future of television. They have a massive installed base of subscribers (among both cord-cutters and cable TV viewers) and they claim a lot of loyalty, particularly among the under-40 crowd.

So yeah, Netflix will lose Friends, The Office and Planet Earth, among other stuff. But they're cranking out a ton of new originals aimed at all sorts of viewer demographics and tastes. At this point, they've pretty much succeeded in weaving themselves into the popular culture, which is a HARD thing to do. If you don't have Netflix, you always kind of feel like you're missing out on something (at least if you're under a certain age). It'll be interesting to see how many Netflix original films receive Oscar and Golden Globe nominations next year.
Oh, don't get me wrong ....
I have Netflix and I like it very much ... however, like we said IF all these contracts end and the programming goes back to the original content owner ... that would leave them with thier Original only ....
Unless, they say merge with someone ... say Amazon or Google or Apple or someone MAJOR ... I think they will struggle.
I hope it doesn't happen, but something will have to be addressed.

I wonder what Netflix stance is on this subject ...
Are they acknowledging that this is a potential scenario, or are they taking the stance that they will be fine on thier own.
 

VictoriaFTA

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Netflix's original programs / licensed foreign content acquisitions are really great. I spend most of my scripted TV viewing time on something that originated from Netflix or a foreign show they acquired the license to.

They have tons of great Spanish shows! The other streaming services neglect international programming and are too busy fighting over the 350 million American pie. Netflix is smart though. They remember that there are other Americas besides the United States of America and as such they are trying to cater to the entire world. So unlike the other streaming services, Netflix's potential subscriber base is 7 billion. The benefit of this is of course as an American you now get more exposure to great international series you wouldn't have been exposed to before the rise of Netflix.

3%, Better Than Us, Cable Girls, Dark, Fauda, Fugitiva, High Seas, Kingdom, Money Heist, Locked Up, Morocco: Love in Times of War, Sacred Games, The Mechanism, The Ministry of Time, Velvet are just some of the outstanding international TV shows Netflix has licensed and provided English subtitles for.

It's no surprise that out of Netflix's 154 million subscribers, 94 million of them are from countries other than the United States.
 

slice1900

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Yet Netflix still loses a few billion dollars a year. If they can't figure out how to turn a profit, they can't last in the long run.
 

NashGuy

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I wonder what Netflix stance is on this subject ...
Are they acknowledging that this is a potential scenario, or are they taking the stance that they will be fine on thier own.
The comments I've seen from those inside (or formerly inside) Netflix indicate to me that they've seen this day coming for a long while. They knew licensed content would serve as their training wheels to help them gather speed in their early years but then that stuff would eventually fall away as they increasingly shifted to their own exclusive originals. And that's what they're doing. They're cranking out new originals at a furious pace. I question how sustainable that strategy is, given the costs involved. We'll see.

But honestly, there's not THAT much licensed stuff on Netflix that I personally watch (although I realize that LOTS of folks watch The Office and Friends there). I like some of the BBC nature docs, like Planet Earth, which will be leaving at year's end (to go to the new Discovery streaming service). But now Netflix has their own Our Planet series. I don't have regular cable TV but I seldom watch any past seasons of cable shows on Netflix. I go there for their originals like Stranger Things, The Crown, Dead to Me, etc.


Netflix's original programs / licensed foreign content acquisitions are really great. I spend most of my scripted TV viewing time on something that originated from Netflix or a foreign show they acquired the license to.

It's no surprise that out of Netflix's 154 million subscribers, 94 million of them are from countries other than the United States.
Yeah, I really do think that Netflix's future is as a global TV service. They've about maxed out their potential subscriber base here in the US (and other English-speaking countries too). So they need to look to those foreign markets for growth, which will mean increasing the % of their production budget spent on non-English-language content. Of course, since Netflix's strategy is about giving as much content as they can to everyone, all that stuff shows up in the American version of Netflix too. And as the American-made content that Netflix licenses gets pulled back by its owners to appear on their own services like HBO Max, Disney+ and Discovery, that leaves foreign-made content as the main source of high-quality shows to license.

So just as foreign Netflix subscribers have always been used to seeing a lot of American-centric, English-language content, I think American Netflix subscribers will slowly find the service to become more diverse with a growing percentage of content being foreign-made. Some Americans will like that. Some won't. If Netflix's AI was as good at suggesting content their subscribers like as Netflix thinks it is, then it shouldn't matter. But then I've never found their recommendation engine to be very good.

At any rate, I think Netflix's path forward has to be as a globalized TV service, "the United Nations of entertainment". How that will play in the US as they compete against more American-centric services like Hulu, Disney+ and HBO Max will be interesting to watch.
 

NashGuy

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Apparently that $67 billion AT&T wasted on DirecTV could've been used to roll out fiber-to-the-home to 90% of all households in the United States -- not just territories AT&T currently operates wired services in!

Report: For an Extra $70 Billion, FTTH Could be Available to 90% of U.S. Homes by 2029 - Telecompetitor
Wow. Interesting. Yeah, I've posted before that buying DirecTV was a strategic mistake on AT&T's part and they should have instead used the money to roll out FTTH broadband. They could have relied on their own home-grown cable TV service (i.e. Uverse TV) to sell to those broadband customers. They bought into an old-fashioned cable TV system (but without an accompanying broadband pipe) right as that business was peaking.

That said, I don't necessarily think that buying TimeWarner was a bad move. Content is king and now AT&T has a lot of it, which they'll use to fuel their HBO Max service. And they have a huge number of existing customers to market it to.
 
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CSM

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Wow. Interesting. Yeah, I've posted before that buying DirecTV was a strategic mistake on AT&T's part and they should have instead used the money to roll out FTTH broadband. They could have relied on their own home-grown cable TV service (i.e. Uverse TV) to sell to those broadband customers. They bought into an old-fashioned cable TV system (but without an accompanying broadband pipe) right as that business was peaking.

That said, I don't necessarily think that buying TimeWarner was a bad move. Content is king and now AT&T has a lot of it, which they'll use to fuel their HBO Max service. And they have a huge number of existing customers to market it to.
UVerseTV is in just 22 states. AT&T saw DTV as being able to expand their TV footprint. Plus they said that they would use DTV’s cash flow to expand FTTH. Could they have been imagining a DTV/FTTH for all their customers and gotten rid of FTTN?
 

Juan

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The money is NOT in fiber...but in services fiber carries
Wow. Interesting. Yeah, I've posted before that buying DirecTV was a strategic mistake on AT&T's part and they should have instead used the money to roll out FTTH broadband. They could have relied on their own home-grown cable TV service (i.e. Uverse TV) to sell to those broadband customers. They bought into an old-fashioned cable TV system (but without an accompanying broadband pipe) right as that business was peaking.

That said, I don't necessarily think that buying TimeWarner was a bad move. Content is king and now AT&T has a lot of it, which they'll use to fuel their HBO Max service. And they have a huge number of existing customers to market it to.
Sent from my SM-G950U using the SatelliteGuys app!
 

Juan

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So is their plan to get it down to just AT&T TV and HBO/Max and use those over 5g?
they need the fiber for internet (and 5g) but the profit is in the services fiber carries..kinda like a phone line in the olden days..you had a small base charge for the line but got charged by the minute for toll calls and also for special features like voicemail and caller id
 

Claude Greiner

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they need the fiber for internet (and 5g) but the profit is in the services fiber carries..kinda like a phone line in the olden days..you had a small base charge for the line but got charged by the minute for toll calls and also for special features like voicemail and caller id
Not only that. From an ongoing service cost to fix, fiber is cheaper than copper
 
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NashGuy

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The money is NOT in fiber...but in services fiber carries
Fiber-to-the-home is the best possible connection for internet service, better than cable (actually hybrid fiber/cable) networks. Once you spend the money to lay the fiber, you can collect on it for years by charging for broadband, as well as other IP-based services like TV, home phone, etc. All-fiber networks are also a lower cost to operate and maintain than hybrid fiber/coax.

If AT&T had used the money they spent on the DTV acquisition to instead implement FTTH, they could have wired up every urban/suburban area in their multi-state footprint and even had money left over to expand into lots of other states too. They could have taken a huge share of broadband and TV service away from Comcast and Charter and kept that business for years.
 

NashGuy

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So is their plan to get it down to just AT&T TV and HBO/Max and use those over 5g?
They'll deliver those services over all the types of networks they run: fiber, fixed and mobile 5G/4G, and AirGig if it proves economically feasible. With the exception of souped-up DSL (e.g. G.fast) in certain apartments and condos, I think AT&T will abandon their DSL network in the next few years. I wonder if there's any part of the old "Uverse" fiber-to-the-node (hybrid fiber/DSL) network here in the Nashville metro that hasn't yet been upgraded to fiber-to-the-home?
 

Jimbo

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Fiber-to-the-home is the best possible connection for internet service, better than cable (actually hybrid fiber/cable) networks. Once you spend the money to lay the fiber, you can collect on it for years by charging for broadband, as well as other IP-based services like TV, home phone, etc. All-fiber networks are also a lower cost to operate and maintain than hybrid fiber/coax.

If AT&T had used the money they spent on the DTV acquisition to instead implement FTTH, they could have wired up every urban/suburban area in their multi-state footprint and even had money left over to expand into lots of other states too. They could have taken a huge share of broadband and TV service away from Comcast and Charter and kept that business for years.
So, with it they could have covered maybe 25-27 states, with D* they cover 50 States plus PR
 

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