Here’s why AT&T decided to buy Time Warner, according to CEO Randall Stephenson

A Q&A with AT&T CEO Randall Stephenson. 

When asked why it makes sense for AT&T to spend $85 billion to own Time Warner when it could simply license that same content, Stephenson's answer came down to Netflix. “A key variable is the direct relationship with the customer, and a lot of the media companies don’t have that direct relationship with the customer,” Stephenson explained. Stephenson cited Amazon as another and mentioned that Disney CEO Bob Iger’s bid to buy most of Fox is also about building a business that will allow it to ultimately circumvent distributors. “Bob Iger clearly has big ambitions to establish that direct relationship with the customer,” he said. It’s about being “vertically integrated.”