A key mega-merger battle front? NYC, of course
It's not a stretch to say NYC is, on a lot of levels, the front line of this battle of the mega-mergers: first Comcast taking over the city's biggest cable provider, Time Warner Cable, and now AT&T's $49 billion deal for DirecTV, the city's satcaster of choice.
Still, the latter isn't solely a reaction to the former.
Rising content costs (driven in part by Manhattan's broadcast networks), the need for scale (all those Big Apple eyeballs), the growing importance of broadband and the increasing use of video on mobile platforms (hello, Internet Week New York!) were the driving forces behind discussions that almost brought a deal a few years back and got them to the finish line this time around.
Together AT&T (via U-verse) and DirecTV would have about 26 million video customers. That would make them the second-biggest force in pay-TV, in terms of subscribers, after the company that would be formed if the merger between Comcast and Time Warner Cable is approved.
Customers in the city -- individuals and B2B -- can expect to see a bundling strategy that most subscription-based businesses, but especially telecoms, use to hold on to customers -- it’s harder to end a relationship with a company when you are getting multiple services from it -- as well as to drive growth.
AT&T extended an early olive branch to Congress and the FCC by saying the deal would expand Internet access to rural areas -- and it could -- but the money to be made from this deal is where population density is greatest.
Here’s why we’re getting together: AT&T, DirecTV
It was not an attempt to secure AT&T's dividend or a response to Comcast's pending purchase of Time Warner Cable , but a long-held desire to get ahead of key business trends that drove Randall Stephenson and Mike White to cement the $48.5 billion dollar deal under which AT&T will acquire DirecTV , they said in an interview with CNBC on Sunday. Rising content costs, the need for scale, the growing importance of broadband, and the increasing use of video on mobile platforms were the driving forces behind discussions that almost brought a deal a few years back and got them to the finish line this time around, both men said. "The last six years for AT&T have been about data, the future is about delivering video at scale," explained Stephenson, chairman and CEO at AT&T.