55493 AT&T & Dish Network Apparently Open To Pay-TV Merger

AT&T & Dish Network Apparently Open To Pay-TV Merger



Over the last twenty-four hours there have been rumblings regarding a merger between DIRECTV and Dish Network’s satellite TV business.

Now, a new report out of Bloomberg says AT&T and Dish are both “open” to a merger, drawing on “people familiar with their thinking” for the information.

At present, besides the “people” it remains to be seen how deep this rumor runs. The people themselves also confirm that the two companies are not in talks over this, and both companies are reported to have declined to comment when asked. Therefore, it remains to be seen how real this possibility is.

What is apparent is that both DIRECTV and Dish TV are facing an issue – subscriber declines. Both services are now quarter-over-quarter seeing subscribers leave either in favor of another service, live TV streaming services, or just outright cutting the cord.

The fact this is happening to most of the traditional Pay-TV services is somewhat representative of the wider industry issue then one that applies specifically to these two companies.

This wider industry issue is why companies like AT&T and Dish have invested heavily in streaming alternatives themselves with Dish owning Sling TV and AT&T utilizing DIRECTV NOW, WatchTV and the upcoming WarnerMedia service.

Of the streaming services fronted by these companies, Dish is currently doing the better as Sling TV is currently the number one live TV streaming service by subscriber count and is competitively priced enough that it has established a firm position within the market.

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However, Sling TV has stagnated recently and over the last six months has seen little to no subscriber growth compared to newer arrivals, such as Hulu + Live TV and YouTube TV.

In contrast, AT&T’s DIRECTV NOW is in somewhat free fall right now after having lost a significant amount of subscribers in the last few months. According to AT&T this is all part of some grander master plan, but irrespective the losses are there.

So neither AT&T nor Dish’s streaming businesses are doing particularly well in terms of generating growth, although they are both doing better than their traditional Pay-TV counterparts which are seeing far greater subscriber losses so far in 2019.

One of the reasons underpinning this rumor is the suggestion that both companies feel now a merger of this caliber is more likely to get the regulatory go-ahead than before – when it may have been (and was) determined that the reducing down of two satellite TV companies would reduce competition within the market.

The belief is now that with streaming here and seemingly continuing to rise year-over-year while traditional TV services continue to take a hit year-over-year, there is enough competition.

Arguably, this might even be sold as a move to ensure both businesses continue to be competitive, even though both currently dominate the subscriber market compared to streaming.

There are some additional caveats that are further leading to the suggestion, such as the understanding a deal would lessen the pressure on Dish due to it being so dependent on its video business, while AT&T might benefit through Dish sweetening the deal with spectrum that could help with AT&T’s wider wireless plans.

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However, while there are logical arguments that can be made why either or both would be better off doing this deal, right now there seems little evidence that such a deal is even on the cards, let alone happening.

This is even more true when it comes to AT&T who is currently investing heavily in a solution to offset its DIRECTV customer losses.

A solution the company only recently argued was going to redefine the concept of TV, and one, the head of AT&T Communications likened to being as exciting as the launch of the first iPhone.

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