With both AT&T (NYSE: T) and Verizon (NYSE: VZ) ramping up mobile video services and making deals with programmers, it's no secret that the two wireless companies are going to become far more influential in the video programming business in the future.
But a new Bloomberg analysis illustrates just how influential. According to the news service, which cites unnamed sources, Time Warner Inc. rebuffed an $80 billion takeover offer from Rupert Murdoch and 21st Century Fox last year, partly because it believed that AT&T and Verizon would soon emerge as aggressive buyers of its content.
Analysts say that top-shelf content is a means for AT&T and Verizon to differentiate themselves in an increasingly competitive market for mobile data. "When you begin to lose pricing power over your pipes and you're national, how do you distinguish yourself? With proprietary content," noted Leo Hindery, managing partner at Intermedia Partners, to Bloomberg.
Along these lines, Verizon recently signed a multi-year program licensing deal with Scripps Networks Interactive, making 45 Scripps TV series available to Verizon wireless customers when Verizon launches its anticipated mobile video service later this year. The shows include HGTV's House Hunters, Food Network's Cutthroat Kitchen and Travel Channel's Bizarre Foods.
The wireless giant has also secured sports content for its new venture through ESPN, CBS Sports, 120 Sports, ACC Digital Network and Campus Insiders. Live-streamed NFL games--part of Verizon's exclusive contract with the premiere pro sports league--will also be part of the mix.
Finally, Verizon just purchased AOL for $4.4 billion and will use AOL'S expertise in programmatic advertising to help monetize its new video service.
AT&T, meanwhile, has formed a $500 million partnership with former Fox COO Peter Chernin and is developing original, "snack-sized" video shorts for its own forthcoming service. The company also is close to closing its $49 billion purchase of DirecTV (NASDAQ: DTV).
For more:
- read this Bloomberg story
Related links:
Verizon's ad-supported OTT pricing may signal new business models to come
Verizon to focus on ad-based business model for OTT video offering
Verizon signs Scripps deal for upcoming mobile video service