AT&T's Time Warner deal to create challenges for Sling, Netflix, Amazon, Hulu and others

AT&T’s announced $85.4 billion acquisition of media giant Time Warner signals a ramp-up in consolidation of content assets that many video industry players and analysts predicted would happen. Gaining ownership of HBO and its online outlet, HBO Now, as well as Warner Brothers and Turner -- which has a classic-movies subscription video on demand (SVOD) service waiting in the wings -- gives AT&T a huge chunk of content for its pending linear over-the-top (OTT) service, DirecTV Now.

AT&T's deal for Time Warner is just the latest – but so far the largest -- in a series of maneuvers by larger corporations to scoop up pricey media and entertainment assets with key pieces of online video delivery services and infrastructure. For example, in August Disney carved away BAM Tech from Major League Baseball Advanced Media, buying a 33 percent share. And last year and early into this year, major cloud players including Amazon and IBM bought up numerous delivery providers. On the surface, Time Warner's media assets should allow AT&T to compete directly with linear multichannel video programming distributors (MVPDs) like Sling TV and PlayStation Vue, and give Netflix, Amazon and Hulu a run for their money. “The need to be competitive in this area is becoming paramount, with the likes of Hulu and YouTube preparing linear-channel-based online subscription offerings of their own,” said IHS Technology Director of Research Ted Hall. Analyst Rich Greenfield of BTIG said that AT&T's strategy in buying Time Warner is to get direct access to Warner Bros and HBO's "content engines." But other analysts are somewhat skeptical that owned content will help AT&T long-term.