AT&T is in the advanced stages of negotiations to acquire Time Warner, according to the Wall Street Journal, which would give the carrier a huge content creation arm. Other carriers, including TechCrunch parent company Verizon, have embraced a similar strategy in order to own more of the relationship between customer and content, rather than just the delivery mechanism of the network.
The WSJ’s report says that the deal could go down as soon as this weekend, but that it also isn’t final and could still collapse or be put off until later. Time Warner’s portfolio includes TNT, CNN, TBS and HBO, and would definitely give AT&T ownership of some of the premium content that drives demand for its satellite TV and broadband services.
AT&T’s acquisition of Time Warner may seem unusual by U.S. industry standards, but in other countries it’s common for carriers and TV service providers to also own the content that they’re delivering to customers. In Canada, for instance, Rogers and Bell own sports teams, broadcast networks, licensing agreements for U.S.-based services like HBO and more.
Consolidation likely isn’t going to be in the best interest of consumers, of course, since it gives the same companies that own the virtual network pipes more control over what goes through them, to whom, and for how much. On the carrier side, however, there’s a desire to diversify offerings in order to avoid becoming a dumb delivery mechanism for more lucrative services, and owning only a product that others including Google or Facebook may eventually provide for free. Plus, access to internet is increasingly being seen as a basic right, which means regulation could dampen provide margins related to network access down the road.