The proposed AT&T DirecTV merger will happen, just as Comcast and Time Warner Cable announced weeks ago that they are doing the same. The consolidation is the response to the changing viewing habits of all us, who watch Netflix on our iPads and depend on the Internet for all our information and entertainment.
As I’ve mentioned before, the cable companies (including those in the satellite arena) have been twirling their mustaches trying to figure out how to compete when Netflix, YouTube, Hulu, iTunes and Amazon Prime are leading the charge for the changing viewer.
We have been waiting for the cable companies to respond, and they have. The Comcast-Time Warner Cable merger’s response was that the new entity would own wireless connectivity. The newly formed company isn’t going to be so much a content provider, but would control – and charge fees – for the watchers of those streaming services. (Netflix CEO Reed Hastings called the fees a tax.)
Now comes the response from the wireless (AT&T) and satellite (DirecTV) providers. It is essentially the same thing, controlling the Internet but it’s a little bit different. AT&T doesn’t provide content like the cable companies do, but it reaches right to your cell phone or tablet without the Internet.
The AT&T-DirecTV combination is an attempt to control as much as possible, from the Internet to the cell phone pipeline to your actual devices. It’s a bold move that signals that we will see more of this. Look out for Sprint (reportedly, currently in talks with T-Mobile) and Verizon to make their own moves, not to mention the Dish Network.
For the end user, that means less competition. Prepare to open your wallet to get the streaming services you currently get relatively cheaply. That’s not to mention the NFL Sunday Ticket, currently with DirecTV. What’s AT&T’s piece of that contract?
Either way, it’ll be users who lose. We’re the ones who are going to pay for all this consolidation. The providers have spoken: They want your money.