AT&T CEO: Forget Our Merger, Netflix is the Real Problem

As far as I know Netflix does not own ANY last mile connections. MY major concern with ATT buying Time Warner is that they will be both the pipe and the content running over that pipe. So to me it is really an apples and oranges situation. Now if Netflix would buy Charter (or some other significant ISP) then ATT would have a case.

As far as Netflix(and others) creating their own content, I believe that was in response to the major content providers threatening to pull their content from Netflix. I seem to recall that Disney was pulling their content from one of the major OTT players (Netflix or Amazon?) when the current contracts run out.

Looks like he has not realized that no competition exists. It’s all really fabricated.

They allowed NBC and Comcast to merge. And Comcast has more last mile than ATT had.

Yeah, Netflix has a lot of customers. What's their average revenue per subscriber? $10?

Is ATT really concerned about a company with $12B in revenue per year?

I just read Netflix has committed to spend ~$16B on content.

Why is a company with ~$160B in revenue worried about a company with $12B in revenue? Why does ATT need to spend $86B to counter Netflix's $16B investment?

Netflix is completely vertically integrated? Is Netflix buying fiber networking companies or wireless spectrum?

That is 16B in commitments. But it is over multiple years.

And I think that was a HUGE mistake. With the limitation on that merger dropping off it could get interesting. They will mostly likely hold off doing anything until this current wave of Net Neutrality settles down. But as we have seen in the past they do not do well resisting the temptation of additional profits.

To Compete with Netflix they need to do the same thing Netflix is doing - produce good quality original content. AT&T already proven that they could with excellent Mr. Mercedes series. Just need to do the same thing few more times. Purchasing TW would give them old content, but most people would rather be more interested in new content.

So, Don't buy TW, create more original content instead. Streaming it OTA is not hard nor novel. By now it's pretty much figured out to minute details.

"prolific"? ...sounds like plain ol' capitalism to me. (Randall, you wouldn't know much about this, but it's something that happens when you have a reasonably competitive market.)

ATT is as good at content creation as they are at underwater basket weaving.

Last I checked, AT&T was in the telecommunications business. Netflix theoretically should be either a customer, or a reason for AT&T customers to use AT&T services.

Citing Netflix as an example of "competition" is just another example of AT&T's monopolistic business practices.

Media is changing and becoming cheaper. ATT wins by NOT being a media company and just staying a telecommunication company only.
People wont always be paying for media, but EVERYONE will be buying internet access.
ATT is ran by tards if they think netflix has anything to do with providing internet connections.
Buying Time Warner or any media company is a horrible idea.

Vertical integrations are the surest way to inhibit competition in any industry.

Transport providers--telecom and cable companies--squeezed out the private ISP entities that made Internet access broadly accessible to the mass market. AT&T didn't drive that innovation--small startup service providers turned AT&T T1 lines and AT&T phone lines (attached to stacks of modems) into a viable Internet access service back in the mid-90s. Only when the market was fully established did AT&T and the cable companies muscle the little guy out of the way.

Monopolies are bad for business and bad for customers. Adam Smith warned about monopolies in 1776, and that warning is still holds true today.

IF you look at the current conditions things might be building up for a change. Our current FCC is generating enough bad will that ISPs might get declared a straight utility and the profits much more limited(think electricity). That plan of Trump's to unify cell service could also put a pretty good crunch on ATT's profits. Considering Trump's current approval rating and that his ego will demand he run for a second term, it is possible he will pick a topic such as this to regain some popularity. While the chance of this occurring is pretty slim, it would leave ATT in a very bad position.

The point is profits for being an internet provider will always be there. Profits for media will not always be there.

Trump's socializing the cell network because of his delusions will never happen. Too many politicians are bought and trump is just paranoid.

IF they get declared a straight utility I would guess that their profits would be about 10% of what they are now.

I am unclear why you think media developers are becoming cheaper. I can see that the cable companies are probably going see a huge drop in profits. Between OTT and ATSC 3.0 cable will be facing ever increasing competition. But I do not see the demand for content decreasing.

I do not think that Trump's unifying cell service would be socializing it(Federalize it would be closer). IF there is a real attack on the cell system (or a false flag, think FCC denial of service attack) he MAY be able to raise the fear level high enough to get it done.

Randall The Mangina only understands crony capitalism--the socioeconomic concept that's allowed his dark enterprise to thrive, lo these many years and decades.

Get the attention off yourself and put the blame on someone else to distract people from the real issues. AT&T CEO and some of our politicians in office right now have a lot of things in common.

vertical integration is actually useful in some industries. While its very harmful in the media industries. In say the space launch industry there is no loss of competition by SpaceX building everything in house as they currently do.

There is too much competition for media companies. Profit margins will be lower than providing internet connections. Staying out of content creation and being an ISP is where the money will be at.

Trump 100% said he wanted to nationalize/socialize the cell phone system. Why would you deny that???
It will never happen.

You're right, but with content AT&T is the Winner! The name of the game these days is who's the leader, AT&T never wanted to be just a dumb Pipe. With Fiber, 5G Wireless, and TW there will be no stopping them!

Yep. Disney won't renew their Netflix deal as they want to create their own OTT services.

I really do not believe that there is too much competition in the content creation arena. While there is a large amount of inferior content being produced, I think the market will sort that out. Companies that are producing an inferior product in a competitive market will not last long. Companies that produce a quality product tend to survive. All that being said, I hope ATT stays out of the area entirely.

While federalize is roughly equivalent to nationalize neither are equivalent to socializing.

Apparently these corporates care about what the investors think, so spending money on content creation would worry them over buying out another company which means the profit would go to them in time.

never really was about the content.. without the pipe/transport into the home, you got JACK... nobody's going anywhere without it.. Google realized that over 20 years ago when they were trying to get youtube off the ground floor. today, google is an actual ISP.. their execution of the google fiber business plan sucks, but that's their fault.. in reality, people are treating YOUTUBE as an alternative content "CHANNEL" legal plus pirated content and all.. see the big cableco business model in EVOLUTION..

what's ironic is that the big telcos are true believers that one day wireless will overtake wired connections on bandwidth.. maybe they're right, BUT it will be FAR, FAR off in the distance (talking 30+ years) AND alot of regulatory obstacles remain in the way.. overpriced spectrum & jaded muni's (and in the end the consumers) who are angry about how bad they were treated with the deployment of wire line. ATT would be better served by refocusing on being a last mile carrier getting both wired and wireless assets simultaneously built out in the SAME geographies at the same TIME.

It's a shame the US govt didn't get on that. There was promise back when DSL was king and telcos had to rent copper to anyone who wanted it, but the regulations didn't change with the times.

Other anglosphere countries like the UK, Canada, Australia and NZ all have regulations that force incumbents to open all of their networks up - even modern FTTH systems - to everyone. Lots of competition, prices are reasonable, no need for net neutrality to be enshrined in law as there actually is a free market that works.

Here in the UK, the largest pay TV company (satellite based, think Dish or DirecTV) has organically grown to be one of the biggest ISPs, and the incumbent telco has gone into the TV business. Both companies have no problems peering with the BBC, Netflix and co. despite the apparent competitive threat.

Same thing as before, just instead of T1s and phone lines it's 10gig ethernet links and double tagged VLANs.

It is socialism.

But...anyone can make a theater quality movie at home with a green screen. Media is getting cheaper to make every day and the returns will get lower and lower because of lots of competition.
There are people right now that dont do anything but watch youtube videos for free for entertainment.

The NBC deal was the one that should have been stopped. Vertical integration is a far more significant consumer threat than horizontal integration.

Here's a fact people don't realize: Charter BOUGHT Time Warner, so people should actually be more concerned about this than they are.

Keep in mind, AT&T is also the same company that is peddling a fake bill of goods called the "Internet Bill of Rights" (along with reps such as Marsha Blackburn), and also funded a Think Tank with the express purpose of sabotaging the CRA Resolution of Disapproval, via astroturfing the Representatives with fake Anti-CRA tweets.

On top of that, they've been staunchly against Net neutrality, then have the nerve to pull all this BS while saying, on 12/14, that they're FOR Net Neutrality?

AT&T is not to be trusted under any circumstances.

ATT should stick to providing internet connections and phone service. They shouldn't be trying to sale content at all.

Charter did not acquire Time Warner. They acquired "Time Warner Cable", which was spun into its own entity from Time Warner in 2009.

AT&T is trying to acquire Time Warner, which owns HBO, all the Turner channels (CNN, TBS, TNT, Cartoon Network, etc).