Emily Groch
Emily Groch is Mintel Comperemedia’s Director of Insights, Telecommunications, providing omni-channel marketing analysis and competitive insights to telecom providers.

AT&T has completed its acquisition of Time Warner, after successfully arguing its case in federal court that acquiring Time Warner would enable it to better compete with tech giants Facebook, Amazon, Netflix and Google. The merger gives AT&T control of Time Warner’s wealth of popular content, across a staggering number of assets, including HBO and Warner Bros. Studio. Owning this content obviously helps AT&T to compete with Netflix and Amazon Video, which both invest billions each year to expand their burgeoning libraries of original content. The merger will also enable AT&T to marry its wealth of customer data with Time Warner content, in order to offer precise targeted TV advertising capabilities, likely following consumers from one screen to the next.

The benefits for AT&T are clear, but how will the merger influence AT&T’s marketing strategy and the competitive landscape for telecommunications providers in the months ahead?

Zero-rating expansion

AT&T’s wireless customers can already stream unlimited DIRECTV content over the AT&T network without eating into their monthly data allowance. In the immediate future, expect HBO streaming to join the zero-rating list. Additionally, as AT&T expands its own streaming video portfolio, these services will be zero-rated, too. With the repeal of Title II net neutrality rules, AT&T won’t have to worry about government push back for zero-rating its content, or for giving it away for free to those who choose AT&T wireless.

Free services/Big bundling discounts

AT&T already offers a wide variety of discounts or incentives to customers that subscribe to multiple services and qualifying AT&T unlimited wireless customers already get HBO free for life. It is possible that AT&T will make HBO channels permanent fixtures in its DIRECTV packages – without the add-on price. AT&T also promised that if the merger was approved, it would offer a $15/month, sports-free streaming video service called AT&T Watch TV, which its wireless customers will get for free. The message is clear: choose AT&T wireless (or AT&T internet or DIRECTV), and you’ll get a lot of free content that you’d have to pay for if you’re getting the service from someone else.

Your favorite characters selling wireless and internet

AT&T will have free reign to use popular Time Warner movie/TV content and characters in its advertising efforts. We’ve already seen this sort of approach from Comcast, with Universal Pictures Minions integrated into marketing efforts and interactive experiences on the X1 platform. Comcast has started selling movie tickets to Universal films via its X1 platform. Now that AT&T will own Warner Bros. Studio, it will be free to incorporate Batman, Wonder Woman, and many more popular characters into its customer experiences and marketing efforts.

Time Warner content gets expensive for competitors

While owning all this content is great for AT&T, competitors might face higher fees to carry popular networks such as TBS, TNT, CNN and Cartoon Network. The American Cable Association, which represents independent cable providers in the US, has spoken out against the merger.

Pressure for more M&A activity

The AT&T/Time Warner merger should put pressure on other wireless providers to be able to offer similar compelling wireless/video bundles. T-Mobile is already working toward this with its acquisition of Layer3 TV. Unfortunately, Layer3 TV is a content distributor as opposed to a content creator, and does not own any exclusive content to give T-Mobile an edge. Additionally, Verizon is reportedly looking to partner with a streaming video provider to offer compelling bundles to its customers, after abandoning its own streaming video efforts. Meanwhile, FANG might become more inclined to scoop up a wireless provider. Watch this space.