AT&T Starts a Streaming Service in a Wildly Competitive Market

Media

Published: October 11, 2018 6:55 am

Last Updated: January 11, 2020 4:35 pm

AT&T Inc. (NYSE: T) will launch its own video streaming business, with program assets it has acquired from its buyout of Time Warner. It has put itself onto on a tough road currently dominated by Hulu, Netflix and Amazon, which makes its prospects limited.

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The company announced in an SEC filing:

On October 10, 2018, we announced plans to launch a new direct-to-consumer (D2C) streaming service in the fourth quarter of 2019. This is another benefit of the AT&T/Time Warner merger, and we are committed to launching a compelling and competitive product that will serve as a complement to our existing businesses and help us to expand our reach by offering a new choice for entertainment with the WarnerMedia collection of films, television series, libraries, documentaries and animation loved by consumers around the world. We expect to create such a compelling product that it will help distributors increase consumer penetration of their current packages and help us successfully reach more customers.

Netflix and Amazon each have over 100 million video-streaming customers. They invest billions of dollars in their own programming. On a lesser basis, so does Hulu. And Disney plans to start a similar service. AT&T is very late to this market, and one has to wonder how it will edge out these much larger companies. Streaming may not be a zero-sum game if people are willing to take one more service, but there is no reason to believe that is likely.

AT&T is launching a streaming business because it has the assets to do so. That does not make it a good idea.

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