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Mobile 'Sunday Ticket' Illustrates Value of DirecTV for AT&T

TMCnet Feature

June 09, 2014

Mobile 'Sunday Ticket' Illustrates Value of DirecTV for AT&T

By Gary Kim
Contributing Editor

Many observers think it is foolish for AT&T to buy DirecTV (News - Alert), a move that makes AT&T a major national supplier of linear entertainment video, just at a point when most observers think linear video is about to be disrupted by “over the top” and “on demand” video.  

But there is a countervailing argument, namely that the major suppliers of linear video will be best positioned to gain content rights for over the top or mobile video rights. In that sense, AT&T (News - Alert) is gaining not only market share in linear entertainment video, but strategic advantages that will help it gain rights to tomorrow’s online-delivered product as well.

That is particularly important for “real time” content such as sports and news that will remain the primary formats driving the value of linear programming.

Pre-recorded content such as movies or TV series content arguably will not command the same price premium.

That is one present difference between Verizon (News - Alert) and AT&T thinking on video services in the next, “post-linear” era. Verizon now believes it will be more profitable to sell pre-recorded content, while AT&T thinks real-time content will provide higher distinctiveness.

Somewhere in between live sports and news, and movies, are less-popular “real time” shows.

But AT&T has broached the idea of making “Sunday Ticket” National Football League content available to AT&T mobile customers.

AT&T further has talked about allowing its mobile Sunday Ticket customers to watch on their mobile devices without the viewing counting against their Internet access usage allowances.

Additional content rights would have to be negotiated, to allow an AT&T-owned DirecTV Sunday Ticket package to be sold to AT&T mobile customers. But that is one example of how the DirecTV acquisition could be strategic for AT&T. While Sunday Ticket is viewed as an important unique content asset, simple volume will mean AT&T has negotiating heft when seeking streaming rights for its mobile offerings. 

Edited by Maurice Nagle

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