Getting Bigger For Bigness' Sake: AT&T Announces Deal To Buy DirecTV, A Deal That Even Confuses Wall St.

Deals

from the well-we-gotta-buy-something dept

Mon, May 19th 2014 2:44pm — Mike Masnick

This has been rumored for a bit, but over the weekend AT&T officially announced plans to buy DirecTV for $50 billion. DirecTV is one of the companies perpetually being bought and sold (or rumored to be). The company has been involved in more aborted mergers than I can remember. Either way, while Wall Street folks often like just about any merger announcement (mergers and later spinoffs are great moneymakers for the banks), even it has been scratching its head at this particular deal. At best, it seems like a sort of reaction to Comcast-Time Warner Cable and an attempt to get bigger for the sake of bigness. Though, of course, it's getting bigger in a pretty saturated market (and one that is actually on the decline due to cord cutting). Perhaps it's an admission that AT&T's own TV service, Uverse, just hasn't done that well. Or maybe it's just an admission that AT&T is swimming in too much cash.

Either way, if both this and the Comcast/TWC merger go through, then we'll have an almost complete duopoly on pay TV. Congress wasted no time in announcing that hearings will have to be held about the potential merger, and, as with the Comcast deal, expect months of puffed up rhetoric and questionable op-ed pieces, as lobbyists work over time to make sure the deal happens. Of course, there is another way that the public can make their own statement on all of this: cut the cord and stop relying on terrible pay TV deals that really just aren't worth it any more.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: acquisition, merger, pay tv, satellite
Companies: at&t, directv

36 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 19 May 2014 @ 2:56pm

They were before?
"cut the cord and stop relying on terrible pay TV deals that really just aren't worth it any more"

I remember paying to watch TV...yeah those were the (lazy) days eh? Just hang out on the couch watching whatever bullshit media they wanted to cram down my throat that night... or on the weekends.

Goddamn it was nice not having enough other stuff to do to keep my occupied.
[ link to this | view in thread ]
S. T. Stone, 19 May 2014 @ 2:59pm

Growing larger for the sake of growing larger.

Ain�t that the perfect way to describe cancer?
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 3:02pm

TV has pretty much run its course
TV news, with few exceptions, is awful. Local news is driven by "if it bleeds, it leads" and national news is driven by endless arguing heads.

TV drama has largely been replaced with "reality" shows, which are designed to appeal to people with the intellectual and emotional maturity of a 13-year-old. What dramas remain are essential puff pieces for police, the CIA, the NSA, the FBI, SWAT teams, and the military.

TV comedy is formulaic and stale.

TV talk shows, ditto.

Sports still holds some appeal (depending on if one's into that) and some of the coverage is quite good: ESPN's "30 for 30" video essays are uneven, but when they're good, they're very good. But it's increasingly more difficult to remain interested in pro sports, where players often earn insane salaries and behave like illiterate thugs.

Movies? They're butchered. Or DRM'd. Or both. Hollywood has made it so incredibly difficult and annoying that instead of pirating them, now I just don't even bother. Maybe I'll see their latest award-winning flick in 5 or 10 years, maybe not. It no longer matters to me...which should frighten the hell out of them, as "apathy" is a far worse enemy than piracy.

Educational programming? PBS is shilling for money every time I check or showing frauds like Deepak Chopra, a con man and snake-oil salesman. The History, Discovery, Learning, etc. channels are nonstop reality shitholes.

Culture? Bravo and A&E used to at least make some attempts to bring theater, dance, etc. to the screen. Now? Reality shitholes.

Really the only high-quality channel I can think of out of the dozens that Comcast provides in its extended basic package is TCM: Turner Classic Movies. At least they show the damn movies without butchering them and interrupting them, and Robert Osborne et.al. deliver interesting commentary.

(As an aside, I took the time recently to check how many channels I've NEVER watched. 54. 54 channels that I'm paying for and have no interest in but Comcast insist on packaging. No wonder they're afraid of a la carte.)

I've been fiddling with an antenna, for the first time in a long time. (I'm in a difficult location. It's going to take some tweaking.) If I can pull in enough channels, then Comcast will be gone...until of course Verizon gets around to abandoning its copper plant in my neighborhood, at which point my DSL will stop working and my one and only choice for "high-speed" Internet will be Comcast. (No FIOS here. Never will be either.)
[ link to this | view in thread ]
PWGuy097, 19 May 2014 @ 3:10pm

Pay TV Deals - No "Current" Alternative
RE: cut the cord and stop relying on terrible pay TV deals that really just aren't worth it any more.

If I could figure out how to get non delayed Doctor Who from the BBC my cord would be cut tomorrow.

The "pay TV deal" forces me into a top tier package just to get BBC America.

You reading that BBC? Alternative business models that put content in the hands of viewers appreciated.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 3:16pm

Its all about wireless spectrium.
[ link to this | view in thread ]
jupiterkansas (profile), 19 May 2014 @ 3:17pm

Re: TV has pretty much run its course
For all the money people spend on cable, I could buy a shelf full of blurays that will last me years. I can watch on my own time and pause whenever I want.

Of course, I don't even have to do that because my local library offers all I could ever want to watch for free.

So I'm left with a lot of money to spend on things like live theatre and live music, and I can easily say my life is so much better.
[ link to this | view in thread ]
jupiterkansas (profile), 19 May 2014 @ 3:19pm

Re: Pay TV Deals - No "Current" Alternative
Or you could just stop caring so much about Doctor Who.

Reconsider how much you're paying to keep up with the latest episode of a TV show - maybe enough for a plane ticket to England.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 3:27pm

I thought PPV TV was bad already, 12 years ago. With the Wall Street mentality of what have you done for me today, it's been on a roll of increasing prices and decreasing the quality of the shows.

I pulled the cord then and haven't paid another month of paid tv broadcasts. I despise a commercial and it's been a long time since I heard a commercial on tv. Not hard considering I don't own one anymore and am not thinking of buying a new method of having my very own spy in the living room.

So let them run up the price on PPV. I could care less because I am not one of their customers and am not going to be one as long as the present methodology continues. I don't look for it to change and I'm good with that cause they are not getting any money from me.
[ link to this | view in thread ]
John Fenderson (profile), 19 May 2014 @ 3:30pm

Re: Re: Pay TV Deals - No "Current" Alternative
This. Is Doctor Who great? Certainly. Is it so great that it's worth waiting for it to come out on Netflix/Hulu/DVDs? Absolutely! It is so great that it's worth continuing to support cable TV? Not even close.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 3:35pm

In a way I'm hoping this would be the undoing of them. It would be great if this turned out to be a huge drag on AT&T's later on, and then it will lead to a loss of customers. I just hope Verizon doesn't buy the leftovers.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 3:48pm

I'll take responsibility for this happening, just the other day I said to myself "I don't think DirecTV could get any worse."
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 3:50pm

Re: Re: Re: Pay TV Deals - No "Current" Alternative
Maybe not to you. But thanks for deciding what's right for everyone else in the world. I don't know how we'd get along without you.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 3:50pm

instead of allowing these two mergers go through, Congress ought to go totally the other way and split these two massive companies along with Verizon etc into smaller entities and instigate the much needed competition instead of the various 'monopolies' that are in play atm! one of the things Congress should be doing is stopping and preventing monopolies and give consumers a reasonable deal. rather, they have done the exact opposite and given consumers deals that are some of the roughest in the 'civilised' world!
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 4:03pm

Re: TV has pretty much run its course
But how do you feel about
TV ?
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 4:41pm

Re: Re: Re: Pay TV Deals - No "Current" Alternative
I remember hiding behind the couch in 1960s England, scared witless of daleks and headless bodies (I could still have nightmares if I chose). It wasn't THAT great then, I can't imagine paying for it now. Get a grip chaps.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 4:44pm

Pay for net, get free tv
I like pre-programmed tv-- sometimes I don't want to "decide" what to watch, I just want brainless filler.

I had always paid for basic cable (ok, actually "enhanced" cable, since basic has none of the popular cable stations), but since I didn't ever order PPV, I would skip their box and just plug in to my tv.

Then I realized, if I'm getting an Internet connection, they don't have a convenient way to turn off the cable tv signal. Sure, they could come out & climb the pole & install a filter, but they're not doing that, are they?

So now I just order an Internet-only connection from the cable company, hook up a splitter, and the tv connection just works. Even a few of the digital channels.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 5:04pm

Re: Pay for net, get free tv
Stealing cable tv, wow.

Here's how the logic goes: Just because it's technically feasible doesn't make it right. You're watching TV that you're not paying for using unauthorized equipment.

I remember the backlash when people were hacking DirecTV (and Dishnet for that matter) back in the mid-90s.

God forbid people modify the equipment that they purchased to decrypt a signal that was being broadcast into their back yard whether they paid for it or not...
[ link to this | view in thread ]
any moose cow word, 19 May 2014 @ 5:14pm

Just like Verizon, AT&T probably is looking to shed its aging copper infrastructure in favor of wireless, so Direct TV makes sense it that it's still looking to compete with TW/Comcast.

I don't think that AT&T will abandon uverse just yet, but its reach is seriously hampered by the effective distance of a digital signal over an unshielded phone wire. UVerse is probably already extended about as far as it's going go without going fiber over the last mile, and people without DSL are ditching their residential lines in favor of wireless anyway. Wireless is more profitable, but can't support video. Satellite would fill in the the large gaps in uverse's service. (http://www.att.com/u-verse/availability/caim-out-of-footprint.jsp)

Personally, I think that people shouldn't expect these services to be bundled together, but that's where the market is for the immediate future. In the long term, however, everything will eventually switch to more internet based video-on-demand and voice services. Without the solid infrastructure to support the raising demand for internet video, it's going to take more than Direct TV to save AT&T.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 5:59pm

Re: Pay for net, get free tv
Won't work here. Signal's encrypted.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 7:25pm

Re: Re: TV has pretty much run its course
While I don't really care to watch sports all that much (I may watch a game here and there with other people) there are some people that absolutely insist on watching sports. and that's where they have you.
[ link to this | view in thread ]
Anonymous Coward, 19 May 2014 @ 7:28pm

Re: Re: Re: Pay TV Deals - No "Current" Alternative
I think you mean is it so great that it's not worth waiting for it to come out on ...

I think where they have most people, though, is sports.
[ link to this | view in thread ]
madasahatter (profile), 19 May 2014 @ 7:53pm

Re: TV has pretty much run its course
AC, your observation about apathy should be more chilling to Les Moonvies aka brainless wonder than pirating. Pirates are interested in seeing the last release. Those of us who are apathetic to TV are more devastating because we problem would not really miss most programming if there was no TV or cable.
[ link to this | view in thread ]
PRMan, 19 May 2014 @ 8:01pm

Re: TV has pretty much run its course
Buy a Roku box and install the private channels Livestream and NowhereTV. Lots of classic movies, local news, etc.
[ link to this | view in thread ]
PRMan, 19 May 2014 @ 8:02pm

Re: Pay TV Deals - No "Current" Alternative
Or pay for AdFreeTime for $2 a month and watch it whenever you want on iPlayer.
[ link to this | view in thread ]
ChurchHatesTucker (profile), 19 May 2014 @ 9:12pm

Win/Win
Either way, if both this and the Comcast/TWC merger go through, then we'll have an almost complete duopoly on pay TV

In which case they win. Or that fact is recognized by suddenly public-spirited lawmakers and the Comcast/TWC merger is sunk. In which case they win.
[ link to this | view in thread ]
zip, 20 May 2014 @ 1:28am

stepping stone
"an attempt to get bigger for the sake of bigness .... then we'll have an almost complete duopoly on pay TV."

Sometimes a merger that appears to make little sense in itself might make much more sense when viewed as just a stepping stone in a long-term strategy.

I think AT&T's ultimate goal is to own Comcast ... in which case there would no longer be a duopoly.
[ link to this | view in thread ]
Andypandy, 20 May 2014 @ 3:02am

Re:
If only Google fiber could be implemented faster this would not be an issue, Look how well the UK has moved further into the fast lane, almost every person has or will have access to 80mb fiber in the near future 3-5 years at most an additional charge of $5pm for fiber. They, the government used taxpayers' money to help BT Telcom to build out fiber to the cabinet. Now all it will take is for a business to enable FTTH and charge a small fee. If it is BT well i don't mind as the infrastructure build out is the most important thing not the different ISP's who all have to compete on a level playing field. Damn they are now supplying internet access through dsl at �3.50 a month, yes around $5 for unlimited and no caps no blocking internet access that is on average 15mb in speed.

Yes in the Uk you still have to pay for line rental which is used to keep the system up and running. but even then it is super cheap for even those in the UK where anyone can afford dsl and reliable dsl in most areas.
[ link to this | view in thread ]
Jeremy Lyman (profile), 20 May 2014 @ 6:33am

Have you actually tried to "Cut the cord?"
It's more expensive to get naked internet than it is to get Internet and TV together. They want you confused about the relationship between connection infrastructure and content subscription so that they can leverage Natural Monopoly without regulation to keep content competitors out.
[ link to this | view in thread ]
art guerrilla (profile), 20 May 2014 @ 7:51am

Re: Re: Re: Re: Pay TV Deals - No "Current" Alternative
yep...
*tried* to cut the cord, but SWMBO likes watching sports even more than i do (which is less and less); its not so easy to do what you want -even as a matter of principle- when your significant other doesn't have the same fervor for these issues...
besides, with the grandmonsters who visit, it would be unacceptable to NOT have Dora the Explorer, Backyardigans, or whatever crap they watch...
so, i can be all Screw The Man, man ! ! ! but it don't mean shit when you don't control your own destiny...
[ link to this | view in thread ]
John Fenderson (profile), 20 May 2014 @ 8:07am

Re: Re: Re: Re: Pay TV Deals - No "Current" Alternative
You're welcome.
[ link to this | view in thread ]
any moose cow word, 20 May 2014 @ 9:56am

Re: Have you actually tried to "Cut the cord?"
Bundled internet speeds are usually far slower than straight internet. It may make the introductory prices seem cheaper on paper, but you're really getting less bandwidth for the money. If you were to compare apples to apples, bundles with the same internet speed that you'd get with just internet alone, the bundles are always more expensive.
[ link to this | view in thread ]
John Fenderson (profile), 20 May 2014 @ 10:08am

Re: Re: Have you actually tried to "Cut the cord?"
That's not true with Comcast in my area. I get my broadband bundled with cable TV (that I never use and haven't even hooked the converter box up to) because it's cheaper. That costs me around $70/mo. If I were to get the exact same level of service without the TV portion, it's around $100/mo.
[ link to this | view in thread ]
jupiterkansas (profile), 20 May 2014 @ 12:22pm

Re: Re: Re: TV has pretty much run its course
Which is why people should play sports instead of watching it. We'd all be a lot healthier too.
[ link to this | view in thread ]
any moose cow word, 20 May 2014 @ 1:30pm

Re: Re: Re: Have you actually tried to "Cut the cord?"
I'd checked every ISP around here when I moved, and they all pull the same trick with bundles, but Comcast isn't in my area. They're legendary for price gouging, but that's unbelievable.
[ link to this | view in thread ]
any moose cow word, 20 May 2014 @ 1:56pm

Re: Re: Re: Re: Have you actually tried to "Cut the cord?"
Well, except AT&T. I can't get DSL here, but at my previous apartment they claimed my line would support 6mbps. However, they'd only offer it with a uverse bundle.
[ link to this | view in thread ]
I'm_Having_None_Of_It, 22 May 2014 @ 6:14am

Re: Pay TV Deals - No "Current" Alternative
You reading that BBC? Alternative business models that put content in the hands of viewers appreciated.

Sorry, the BBC is hog-tied by its charter - it's publicly funded. They should provide a YouTube-based service of programmes that have already aired and either ask for sponsorship to make more of them or advertise their other programmes. That is the only advertising they're allowed to do, per the Charter.
[ link to this | view in thread ]