AT&T Has Become a New Kind of Media Giant

AT&T CEO Randall Stephenson’s strategy [to synergize all of the company properties] is breathtaking in scale and scope, the largest transformation underway at any company in the Fortune 500. AT&T’s main traditional competitor, Verizon, has chosen an entirely different path, and Stephenson’s new rivals are in markedly different businesses. Stephenson marvels, “I spend as much time thinking about Amazon and Netflix as I do thinking about Verizon and Comcast now.”

The grand vision begins with combining all the major elements of the media and telecom businesses, which no company has ever done before. Time Warner’s film and TV studios make some of the most successful and honored entertainment anywhere. Its cable networks—including TBS, TNT, CNN, Cartoon Network, and Turner Classic Movies—are distribution powerhouses. DirecTV carries those networks and others into homes through its satellite system. Add in AT&T’s wireless and landline customers, and Stephenson boasts that AT&T has “170 million distribution points we can push this through.” With such a combination of media ­assets, the theory goes, AT&T can achieve unprecedented advantages. It can differentiate its fast-commoditizing wireless network by offering customers deals on its proprietary content. It can expose its content to vast audiences through all its networks. Because it collects staggering volumes of customer data through its wired, wireless, and satellite networks, it can enable advertisers to target their messages with new precision and, in some cases, even track customers who have seen specific ads and thus gauge how the ads performed—services for which advertisers will gladly pay a big premium.