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AT&T’s Vision for Time Warner Content is Mobile-Friendly and Ad-Based

By Diana Goovaerts | May 24, 2017

After achieving sooner-than-expected success with its DirecTV Now offering, AT&T is now turning its attention to crafting Time Warner content that will be more mobile friendly. What does that mean, exactly? Well, let’s just say if AT&T CEO Randall Stephenson has his way, 20-minute Game of Thrones episodes could soon be on the way.

Here’s why.

In comments delivered at an investor conference, Stephenson indicated the carrier’s DirecTV Now mobile app pulled in subscribers – 200,000 of them, to be specific – much more quickly than AT&T anticipated following its launch in December. Stephenson said that told the carrier demand for “premium content integrated with the mobile experience was really, really high.” Ultimately, he said that conclusion convinced AT&T to make an acquisition move to actually own content rather than just delivering it.

“While DirecTV gave us great access to premium content, not owning it limits what you can do. Can you curate the content uniquely for a mobile environment? Can you create new ad supported models for a mobile environment?” he explained. “Time Warner changes the game.”

The Time Warner acquisition will give AT&T the opportunity to craft content specifically for the mobile experience, he said. And that could mean cutting episode lengths to be better suited to mobile viewership.

“I’ll cause (CEO Richard) Plepler at HBO to panic when I say this, but can you begin to think about things like Game of Thrones as an example, where in a mobile environment, a 60-minute episode may not be the best experience? Should you think about 20-minute episodes?” Stephenson asked.

Stephenson said AT&T also plans to capitalize on the combination of its massive mobile, broadband, and pay TV distribution with Time Warner’s “massive inventory of advertising.” The latter, he said, draws some 750 billion impressions each year in addition to AT&T’s 150-200 billion. Stephenson indicated AT&T will be able to monetize those through targeted advertising, driving up yields that can either flow to the bottom line or be reinvested in customer mobile content. But that requires making sure AT&T has the ability to take unique viewer information from DirecTV and mobile subscribers and feed it into models for advertising within Time Warner. Getting that system up and running is a priority for the carrier right now, he said.

Stephenson added he’s confident AT&T’s “really dense cell site grid” and spectrum position with 60 MHz of fallow airwaves will be sufficient to accommodate the increase in video traffic that these plans entail. But that doesn’t mean AT&T will sit back if more spectrum becomes available ahead of 5G.

“We’ll be looking, whether it be the government auctions in 2018 (or) secondary market transactions, to continue to enhance that position,” he noted. “But we’ve got a really good position to begin deploying nationwide 5G footprint as we get the standards, the technology, and the equipment in place.”

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