AT&T's Stankey says company's relevance rests on content

AT&T's John Stankey announces the company's tie-up with DirecTV after the deal completed in late 2015 in a screenshot from a promotional video. Image: AT&T
AT&T Entertainment chief John Stankey wants the provider to stay "relevant" by creating its own content. (Screenshot: AT&T Media Kit presentation)

AT&T Entertainment CEO John Stankey said his company needs to go all-in on content creation in order to remain relevant.

His comments came Monday during an address Monday at Mobile World Congress in Barcelona, Spain, according to The Hollywood Reporter.

"We just cannot envision a future where AT&T is relevant if we don't directly participate in some of the water flowing through our pipes,” Stankey said, adding that the connectivity-content equation is now more heavily weighted toward content.

RELATED: AT&T, Time Warner offer merger details to quell senators' concerns

Of course, Stankey’s comments make perfect sense in the context of AT&T’s current pursuit of an $85 billion merger with Time Warner Inc. The companies have positioned the deal as a vertical merger—similar to Comcast’s acquisition of NBCUniversal—which will give the company access to both distribution and content, and better position AT&T’s DirecTV and U-verse platforms to compete with cable providers.

But AT&T and Time Warner have had to defend the acquisition against the worries of lawmakers concerned that consolidating the companies would give AT&T the power to withhold popular Time Warner content like CNN and HBO from other providers.

In a letter (PDF), AT&T CEO Randall Stephenson and Time Warner CEO Jeff Bewkes outlined how the transaction will benefit consumers and promote competition.

In particular, the companies said that the merger will help lift some of the bargaining friction between content providers and distributors and allow for faster innovation.

“AT&T and Time Warner have both encountered such friction as they have sought to bring innovations to market. That friction has kept consumers from getting the full suite of innovative features that they want,” the companies wrote.

Specific video-related innovations that AT&T and Time Warner see possible post-merger include:

  • Short-form programming optimized for presentation on mobile devices
  • Interactive and personalized methods of viewing sports and other live events
  • More relevant advertising in ad-supported video services
  • Integrations of professionally produced content with virtual reality or augmented reality services
  • Services that encourage consumers to combine professionally produced content with their own creative content and share the results on social media
  • Greater choice, convenience, and value in programming bundles