AT&T is reportedly raising the price of DirecTV Now by $10 a month and notifying current subscribers that they will pay the new, higher price starting in April.
DirecTV Now packages today cost $40 to $75 a month before add-ons such as HBO, and current customers will reportedly pay $10 a month more regardless of which package they subscribe to, making the prices $50 to $85. News reports say AT&T is also reconfiguring its channel packages for new subscribers, adding HBO to basic packages while eliminating dozens of channels that aren’t part of the AT&T-owned Time Warner Inc. New customers will reportedly be able to choose from two slimmer plans costing $50 or $70 a month.
The price hike and channel reduction are happening despite AT&T promising that its acquisition of Time Warner would lower prices for customers. When the Department of Justice tried to stop the merger, AT&T told a judge in a May 2018 court filing that the merger “will enable the merged company to reduce prices.”
President Donald Trump tried to pressure the Department of Justice into blocking AT&T’s acquisition of Time Warner Inc., according to a new report by The New Yorker. However, White House staff apparently ignored the president’s orders to pressure the DOJ, and it’s not clear whether Trump ever made any demands to the DOJ directly.
The New Yorker report—titled “The Making of the Fox News White House”—details Trump’s close relationship with Fox and his disdain for Fox competitors that provide less-glowing news coverage of his presidency.
Trump has long made his hatred of CNN well-known, and during his campaign he promised to block AT&T’s proposed takeover of CNN owner Time Warner. The Trump administration’s DOJ in November 2017 filed a lawsuit to block AT&T’s proposed acquisition of Time Warner. But whether Trump had intervened wasn’t clear—AT&T ultimately succeeded in court and completed the merger, despite failing in an attempt to prove that Trump meddled in the merger review.
A federal appeals court has upheld AT&T’s acquisition of Time Warner, dealing a blow to Trump administration lawyers who had tried to stop the deal.
The Trump administration sued to stop the deal back in 2017, arguing that having AT&T as a corporate parent would give Time Warner too much leverage in negotiations with other cable and satellite network providers. A trial judge, Richard Leon, rejected that argument last June, allowing the deal to officially close a few days later. Now his ruling has been upheld by the DC Circuit Appeals Court.
Media conglomerates like Time Warner engage in periodic negotiations with distributors like Comcast and AT&T. In these negotiations, each party threatens to end their relationship if they don’t get favorable financial terms. But each party also has an incentive not to take too hard a line because failing to reach an agreement could mean a content blackout that’s expensive for both sides.
The company offered a few more details about this new service during the presentation, noting that it will have three tiers of service.
The entry-level package will be focused on movies, followed by a premium service with original programming and “blockbuster movies.” The third service will include content from the first two tiers, then add an “extensive library of WarnerMedia and licensed content,” including classics, kids & family programing, comedy, and other theatrical releases and niche content.
The service will launch into beta in Q4 2019, AT&T said, and will complement WarnerMedia’s existing business. It will also work across devices, and will expand over time to include third-party content through partnerships.
As for selling its stake in Hulu, the company is “looking for opportunities to monetize assets” that are not essential to its current strategies, explained AT&T CFO John Stephens. He said the company was looking at its “minority investments in things like Sky México or Hulu or a variety of other things.”
The mention of the Hulu sale was a part of a larger discussion about paying down $18 billion of AT&T’s $20 billion in debt by the end of next year, which involved raising up $8 billion in cash by the sale of some assets. The Hulu stake could be worth up to $930 million, Variety notes.
Also of note was the company’s not-so-vague threat that WarnerMedia would not be renewing its licensing deals with rival streaming services when their rights expire.
Asked how the new direct-to-consumer effort will be able to compete with incumbents, WarnerMedia CEO John Stankey responded that over the next 18 to 24 months, “we’re going to see a pretty substantial structural shift that’s going to occur…some of the incumbents in that are in that space today should expect that their libraries are going to get a lot thinner,” he said.
“75 to 80 percent of their total viewing tonnage is sitting on a lot of that licensed content. So their pressure is they’ve got to make this pivot over the next 18 to 24 months to get people off of viewing the licensed content that maybe sits in our library or sits in a Disney/Fox library, and get it onto their own,” Stankey added.
The company believes that, over time, it will be able to bring in enough new subscribers to its streaming offers to offset the declines related to cord cutting, which is impacting its satellite TV company DirectTV. In Q3 2019, the company lost 359,000 net DirecTV subscribers as more consumers dropped pay TV in favor of streaming services, like Netflix.
At a price typically reserved for semiconductor companies, telecoms, and pharmaceutical giants, IBM announced today it would pay a record $34 billion in cash and debt to acquire enterprise open source provider Red Hat. Eclipsing Microsoft’s $26.2 billion acquisition of LinkedIn, this is the biggest software acquisition in history. It’s not the biggest tech acquisition ever, though, as that title belongs to Dell’s $67 billion buyout of data storage business EMC.
It’s now been just over four months since AT&T completed its acquisition of Time Warner, and today AT&T has made a move to streamline WarnerMedia assets with the discontinuation of classic film streaming service FilmStruck. The service is now warning visitors to its website that it will be shutting down on November 29, 2018, and as of today is no longer enrolling new subscribers (via Variety).
FilmStruck was available on iOS and tvOS, but it appears that the app has been removed from both App Stores. On iOS, a search for “FilmStruck” guides users to TCM’s new streaming app Watch TCM.
All current FilmStruck subscribers will receive an email with more details, including potential refunds, and the company put together a list of FAQs for more information. FilmStruck will remain in operation for the next month, and in a tweet the company said, “It has been our pleasure bringing FilmStruck to you and we thank you for your support.”
FilmStruck debuted in November 2016, offering a lineup of nearly 2,000 classic, indie, foreign, and cult films, as well as acting as the streaming home to the Criterion Collection. Subscribers paid $6.99/month for the service, or $10.99/month for the service with access to the Criterion Collection. Films available on FilmStruck include the original “A Star is Born”, “Casablanca”, “The Music Man,” and many more.
According to a statement provided by Turner and WB Digital Networks, FilmStruck remained a niche service for its entire lifetime, leading to the discontinuation.
“We’re incredibly proud of the creativity and innovations produced by the talented and dedicated teams who worked on FilmStruck over the past two years. While FilmStruck has a very loyal fanbase, it remains largely a niche service. We plan to take key learnings from FilmStruck to help shape future business decisions in the direct-to-consumer space and redirect this investment back into our collective portfolios.”
A few other WarnerMedia digital services have been shut down following the AT&T acquisition, including the Korean drama-focused DramaFever and digital content TV studio Super Deluxe. According to a source familiar with AT&T’s strategy, “They felt Time Warner overall had too many initiatives,” leading to the pruning of services that lack broad appeal.
Turner Classic Movies offers an alternative for Apple TV owners with the recently launched “Watch TCM” tvOS app. Unlike FilmStruck’s separate monthly streaming service cost, Watch TCM is an app that users can connect to their cable subscriptions to watch “nearly every title playing on TCM.”
Before FilmStruck goes away for good, the Criterion Collection promises that it will keep subscribers informed about the programming they can watch on the service before it shuts down in late November. Looking forward, the company will be trying to find ways to “bring our library and original content back to the digital space as soon as possible.”
AT&T’s WarnerMedia is working on its own streaming service to compete with Netflix, Hulu, Disney, and others, the company announced today.
According to AT&T, the upcoming streaming service is “another benefit” of the merger between AT&T and Time Warner. AT&T says it is committed to launching a “compelling and competitive product” that helps the company expand its reach.
AT&T’s streaming service will include the WarnerMedia collection of films, television series, animation, documentaries, and more. The plan is to “create such a compelling product” that it will help distributors increase customer penetration and help AT&T reach additional customers.
AT&T already owns DirecTV and offers live streaming content through DirecTV Now, HBO Go, and HBO Now.
At the Vanity Fair New Establishment Summit on Wednesday, WarnerMedia CEO John Stankey said that HBO will be a “lead brand” in the new service. From CNBC:
“Around HBO will come a great library of additional content from not only the WarnerMedia properties but also some selective third party licensed content,” Stankey said. “And the driver behind this is really straight forward. We know there’s customers who love to engage with our content — we’ve got a great history of building it — much of which they can’t get in one place.”
Along with HBO, the service will include content from Turner and Warner Bros.
According to Stankey, the new streaming service will feature a “compelling price point” when it launches in the fourth quarter of 2019.
The Department of Justice’s attempt to reverse the AT&T/Time Warner merger received some help yesterday from an unexpected source: the Federal Communications Commission.
The FCC previously allowed AT&T to buy Time Warner without having to undergo a lengthy public-interest review, despite pushback from Democrats in the Senate and FCC. The DOJ fought the merger alone, ultimately losing a court ruling that allowed AT&T to complete the acquisition.
But the DOJ appealed that court ruling last month, and yesterday the FCC gave the DOJ’s case a small boost. The FCC isn’t actually supporting the DOJ’s case, but the commission’s filing points out an error made by the US District Court for the District of Columbia. In US District Judge Richard Leon’s ruling against the DOJ, he said that he was “hesitant to assign any significant evidentiary value” to previous statements that AT&T and the AT&T-owned DirecTV made to the FCC. AT&T’s own statements to the FCC, made in the years prior to the AT&T/Time Warner merger, supported the DOJ’s case that a merged entity could raise the price of programming. Those AT&T statements were made as part of the FCC’s 2010 review of the Comcast/NBCUniversal merger and in other FCC proceedings.